The Amazing Widget Company Issues $538,000 of 7%,10-Year Bonds at 108

question 156

Multiple Choice

The Amazing Widget Company issues $538,000 of 7%,10-year bonds at 108 on March 31,2017.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 includes a ________.

• A)debit to Cash for $538,000
• B)credit to Bonds Payable for $581,040
• C)debit to Premium on Bonds Payable for $43,040
• D)debit to Cash for $581,040

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Definitions:

Wages

Payments made to employees for their labor, typically calculated by hour, day, or piece.

Foregone Opportunities

The benefits or income missed out on when choosing one alternative over another.

Tuition

The fee charged for instruction or education provided by schools, colleges, and universities.

Equality

The condition of having equal status, rights, and chances.