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

question 90

Multiple Choice

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

• A)debit to Cash for $15,000.
• B)debit to Interest Expense for $15,750.
• C)debit to Interest Expense for $14,250.
• D)credit to Premium on Bonds Payable for $750.

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Definitions:

Socio-Economic View

A perspective that considers the interplay between social and economic factors and how they influence each other.

Corporate Social Responsibility

A business model that helps a company be socially accountable—to itself, its stakeholders, and the public. It involves operating in ways that enhance society and the environment.

Broader Social Concerns

Issues or challenges that impact society at large, beyond individual or private interests.

Issue Urgency

The extent to which a stakeholder’s concerns need immediate attention.