A Company Sells a Bond with a Face Value of $10,000

question 173

Multiple Choice

A company sells a bond with a face value of $10,000 and receives a premium of $800.Using simplified effective-interest amortization,what journal entry is used to record the issuance of the bonds?

• A)Debit Cash for $10,800 and credit Bonds Payable,Net for $10,800.
• B)Debit Cash for $10,800,credit Bonds Payable,Net for $10,000,and credit Premium on Bond Payable for $800.
• C)Debit Cash for $10,000,debit Interest Expense for $800,credit Bonds Payable,Net for $10,000,and credit Premium on Bonds Payable for $800.
• D)Debit Cash for $10,000,debit Interest Expense for $800,credit Bonds Payable for $10,000,and credit Premium on Bonds Payable for $800.

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Definitions:

Enlightenment Thinking

A philosophical movement of the 18th century emphasizing reason, individualism, and skepticism towards traditional doctrines.

Birth of Sociology

The emergence of sociology as a distinct discipline in the 19th century, aiming to understand and explain societal structures, processes, and changes.

Class Consciousness

The awareness of one's place in a system of social classes, especially as it relates to the struggle against perceived injustices and exploitation within that system.

Quality of Mind

Mills’s term for the ability to view personal circumstance within a social context.