On January 1, 2014, Zing Services Issued $165,000 of 6-Year

question 48

Multiple Choice

On January 1, 2014, Zing Services issued $165,000 of 6-year bonds with a stated rate of 12%. The market rate at time of issue was 11%, so the bonds were issued with a premium and sold for $172,110. Zing uses the effective-interest method to amortize bond premium. Semiannual interest payments are made on June 30 and December 31 of each year. Which of the following is the correct journal entry to record the first interest payment?

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Definitions:

Target Selling Price

The price at which a company aims to sell its product to achieve its financial goals.

Long Term

Refers to assets, liabilities, or investments that are expected to be held or have effects for a period longer than one year.

Normal Selling Price

Refers to the standard price at which a good or service is typically sold under normal market conditions.

Excess Capacity

Refers to a scenario where a company is operating below its maximum production capacity and can increase output without incurring significant additional costs.