Use the Present Value and Future Value Tables Included in Appendix

question 109

Multiple Choice

Use the present value and future value tables included in Appendix 8 and on the textbook companion website.
- On January 1, 2012, Lawton Corporation issued 10-year, $1,000,000 bonds with a stated interest rate of 10%. The effective interest rate is 10% and interest is paid semi-annually on January 1 and July 1. The journal entry to record the retirement of the bonds on January 1, 2022, assuming all interest has been accounted for, would include a

• A) Debit to Cash of $1,000,000
• B) Credit to Bonds Payable of $1,000,000
• C) Debit to Bonds Payable of $1,000,000
• D) Credit to Bond Interest Expense of $1,000,000

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