The Amazing Widget Company Issues $515,000 of 12%,10-Year Debentures at 105

question 83

Multiple Choice

The Amazing Widget Company issues $515,000 of 12%,10-year debentures at 105 on 30 April 2017.The debentures pay interest on 30 April and 31 October.Assume that the company uses the straight-line method for amortisation.What is the journal entry to record the first interest payment on 31 October 2017? (Round to the nearest dollar. )

• A)credit to Premium on bonds payable for $1288.
• B)debit to Interest expense for $32,188.
• C)debit to Interest expense for $29,612.
• D)debit to Cash for $30,900.

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Definitions:

Quantitative Data

Numerical information that represents the quantity or amount of something, allowing for measurement and statistical analysis.

Y-intercept

The point where a line or curve intersects the y-axis of a graph, often representing the value of the dependent variable when the independent variable is zero.

Simple Linear Regression

A statistical method for modeling the relationship between a single independent variable and a dependent variable by fitting a linear equation to observed data.

Linear Regression

A statistical method for modeling the relationship between one dependent variable and one or more independent variables using a linear equation.