A Company Sells a Bond with a Face Value of $10,000

question 83

Multiple Choice

A company sells a bond with a face value of $10,000 and receives a premium of $800.Using the bonds payable,net shortcut,the company would make the following journal entry:

• A)Debit Cash for $10,800 and credit Bonds Payable,net for $10,800.
• B)Debit Cash for $10,800,credit Bonds Payable,net for $10,000,and credit Bond Premium for $800.
• C)Debit Cash for $10,000 and debit Interest Expense for $800,credit Bonds Payable,net for $10,000 and credit Bond Premium for $800.
• D)Debit Cash for $10,000,debit Interest Expense for $800,credit Bonds Payable for $10,000 and credit Bond Premium for $800.

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Definitions:

Commerce Clause

A provision in the United States Constitution giving Congress the power to regulate commerce with foreign nations, and among the several states.

Preemption Doctrine

The principle that federal law can supersede or override state law in areas expressly reserved for federal regulation or where there is a conflict.

Sales Tax

A tax imposed by governments on sales transactions, typically calculated as a percentage of the sale price of goods and services.

Internet Transactions

Commercial operations carried out online, including buying, selling, and the exchange of services or information.