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:

Organizational Mission

A statement that outlines the purpose, values, and direction of an organization, guiding its decisions and activities.

Foundation

An entity established to provide support through donations or funding to social, educational, charity, or other types of causes.

Direction

Guidance or instructions on a course of action, or the path along which something moves or is aimed to move.

Culture

The shared beliefs, values, norms, and practices that characterize a group of people or society, influencing their behaviors and interactions.