A Ten-Year Bond Has a Face Value of $10,000,a Face $\begin{array}{llr} \text { Bond Interest Expense } &520\\ \text { Unamortized Bond Premium} &&30\\ \text {Cash } &&&550\end{array}$

question 94

Multiple Choice

A ten-year bond has a face value of $10,000,a face interest rate of 11 percent,an unamortized bond premium of $400,and an effective interest rate of 10 percent.The bonds were issued on one of the semi-annual interest payment dates.The entry to record the bond interest expense on the first semi-annual interest payment date is: (assuming the effective interest method of amortization) ,

• A)
• \(\begin{array}{llr}
• \text { Bond Interest Expense } &520\\
• \text { Unamortized Bond Premium} &&30\\
• \text {Cash } &&&550
• \end{array}\)
• B)
• \(\begin{array}{llr}
• \text {Bond Interest Expense } &520\\
• \text { Cash } &&520\\
• \end{array}\)
• C)
• \(\begin{array}{llr}
• \text { Bond Interest Expense } &550\\
• \text { Cash} &&550\\
• \end{array}\)
• D)
• \(\begin{array}{llr}
• \text { Unamortized Bond Premium } & 520\\
• \text { Cash} && 520\\
• \end{array}\)

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