The Amazing Widget Company Issues $500,000 of 6%, 10-Year Bonds

question 56

Multiple Choice

The Amazing Widget Company issues $500,000 of 6%, 10-year bonds at 103 on March 31, 2014. The bonds pay interest on March 31 and September 30. Assume that the company uses the straight-line method for amortization. The journal entry to record the issuance would include a:

• A)debit to Cash for $500,000.
• B)credit to Bonds Payable for $515,000.
• C)debit to Premium on Bonds Payable for $15,000.
• D)debit to Cash for $515,000.

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Definitions:

Pattern Formation

The biological process by which cells arrange themselves into a systematic, organized structure during development.

Signaling Molecules

Chemicals that transmit information between cells in the body, facilitating various physiological processes such as growth, inflammation, and neural communication.

Callus

Undifferentiated tissue formed on an explant (excised tissue or organ) in plant tissue culture.

Trichomes

Small hair-like outgrowths on plants that serve various functions including protection against herbivores and minimizing water loss.