On June 1,2015,Smith & Beecham Services Issued $30,000 of 7

question 77

Multiple Choice

On June 1,2015,Smith & Beecham Services issued $30,000 of 7.50% bonds that mature in five years.They were sold at a premium,for a total of $31,250.The bonds pay semiannual interest payments on June 30 and December 31 of each year.On December 31,2015,what is the total amount paid to bondholders?

• A)$1,125.00
• B)$2,250.00
• C)$1,171.88
• D)$2,343.75

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Definitions:

Accrual Adjusting Entry

An accounting entry made to record revenues that have been earned or expenses that have been incurred but not yet recorded through the normal transaction process.

Interest Expense

The financial charge for the use of borrowed capital, reflected in the income statement.

Insurance Expense

The cost associated with purchasing insurance policies to protect against risks, often reported as an operating expense.

Income Statement Accounts

Income statement accounts include all the revenue and expense accounts that determine a company's net income or net loss for a specific period.