The Amazing Widget Company Issues $500,000 of 6%,10-Year Bonds at 103

question 14

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.The market rate of interest on the issuance date was 4%.Assume 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:

BCM (Body Control Module)

An electronic control unit that manages various functions in a vehicle, such as lighting, windows, locks, alarms, and other body-related functions.

Incandescent Bulb

A bulb that produces light by passing an electric current through a filament, which heats and glows.

Parking Lamps

Exterior lights on a vehicle designed to make it visible in the dark while parked, improving safety.

Electronic Flasher Unit

A device in the vehicle's turn signal system that controls the blinking pattern of the turn signal lights.