Webster Company Issues $1,000,000 Face Value, 6%, 5-Year Bonds Payable

question 166

Multiple Choice

Webster Company issues $1,000,000 face value, 6%, 5-year bonds payable on 31 December 2013. Interest is paid semiannually each 30 June and 31 December. The bonds sell at a price of 97; Webster uses the straight-line method of amortizing bond discount or premium.
-Webster's entry at 30 June 2014, to record the first semiannual payment of interest and amortization of discount on the bonds includes a:

• A) Debit to Bond Interest Expense of $30,000.
• B) Credit to Cash of $33,000.
• C) Debit to Discount on Bonds Payable of $3,000.
• D) Debit to Bond Interest Expense of $33,000.

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