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

question 56

Multiple Choice

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

• A)debit to Cash for $500,000.
• B)credit to Bonds Payable for $515,000.
• C)debit to Premium on Bonds Payable for $15,000.
• D)debit to Cash for $515,000.