[The Following Information Applies to the Questions Displayed Below

question 105

Multiple Choice

[The following information applies to the questions displayed below.]
Webster Company issues $1,000,000 face value,6%,5-year bonds payable on December 31,2018.Interest is paid semiannually each June 30 and December 31.The bonds sell at a price of 97;Webster uses the straight-line method of amortizing bond discount or premium.
-The entry made by Webster Company to record issuance of the bonds payable at December 31,2018,includes:

• A)A debit to Cash of $1,000,000.
• B)A debit to Discount on Bonds Payable of $30,000.
• C)A credit to Bonds Payable of $970,000.
• D)A credit to Bond Interest Payable of $30,000.

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Definitions:

Qualitative Characteristics Exposure Draft

A preliminary document issued by accounting standards organizations proposing improvements or changes to the qualitative characteristics of financial information.

Logical Order

A method of arranging elements in a sequence based on their relationships or hierarchy, ensuring coherence and clear progression of ideas or steps.

Financial Reporting

The endeavor of divulging a firm's financial standing through reports aimed at its administrators, shareholders, and the state.

IASB

The International Accounting Standards Board, which sets and enforces rules for accounting practices worldwide.