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