A Company Issued 8%,15-Year Bonds with a Par Value of $550,000.The

question 104

Multiple Choice

A company issued 8%,15-year bonds with a par value of $550,000.The current market rate is 8%.The journal entry to record each semiannual interest payment is:

• A)
• \(\begin{array}{|c|r|r|}
• \hline\text { Bond Interest Expense } & 22,000 & \\
• \hline \text { Cash } & & 22,000\\
• \hline
• \end{array}\)
• B)
• \[\begin{array} { | l | c | c | }
• \hline \text { Bond Interest Expense } & 44,000 & \\
• \hline \text { Cash } & & 44,000 \\
• \hline
• \end{array}\]
• C)
• \[\begin{array} { | l | c | c | }
• \hline \text { Bond Interest Expense } & 555,000 & \\
• \hline \text { Cash } & & 555,000 \\
• \hline
• \end{array}\]
• D)
• \[\begin{array} { | l| c | c | }
• \hline \text { Bond Interest Expense } & 660,000 & \\
• \hline \text { Bond Payable } & & 660,000 \\
• \hline
• \end{array}\]
• E)No entry is needed,since no interest is paid until the bond is due

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Definitions:

Ethical Decision Making

The process of evaluating and choosing among alternatives in a manner consistent with ethical principles.

Deflected

Redirected or turned away from an intended path or target, often used in the context of criticism, questions, or physical objects.

Affect Heuristic

A mental shortcut that allows people to make decisions and solve problems quickly based on their emotions and feelings rather than analysis.

Ethical

Relating to moral principles or the branch of knowledge that deals with moral principles.