On January 1, a Company Issues Bonds Dated January 1

question 119

Multiple Choice

On January 1, a company issues bonds dated January 1 with a par value of $400,000. The bonds mature in 5 years. The contract rate is 7%, and interest is paid semiannually on June 30 and December 31. The market rate is 8% and the bonds are sold for $383,793. The journal entry to record the first interest payment using the effective interest method of amortization is:

• A) Debit Interest Expense $12,648.28; debit Premium on Bonds Payable $1,351.72; credit Cash $14,000.00.
• B) Debit Interest Payable $14,000.00; credit Cash $14,000.00.
• C) Debit Interest Expense $12,648.28; debit Discount on Bonds Payable $1,351.72; credit Cash $14,000.00.
• D) Debit Interest Expense $15,351.72; credit Discount on Bonds Payable $1,351.72; credit Cash $14,000.00.
• E) Debit Interest Expense $15,351.72; credit Premium on Bonds Payable $1,351.72; credit Cash $14,000.00.

Comprehend the distribution and functionality of cones in the human retina.

Grasp the anatomical position and purpose of suspensory ligaments.

Understand the role of ciliary muscles in accommodation and vision.

Identify the layers and specific components of the retina.

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Definitions:

Financial Statement

Formal records that outline the financial activities and condition of a business, individual, or other entity, typically including the balance sheet, income statement, and cash flow statement.

Objectivity Concept

An accounting principle that requires financial and accounting information to be independent and based on measurable and verifiable data.

Unit of Measure

A standard quantity used to express a physical quantity, ensuring uniformity in the reporting of financial and operational data.

Business Entity Concept

An accounting principle that treats a business as separate from its owners or shareholders for financial reporting purposes.