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question 172

Multiple Choice

[The following information applies to the questions displayed below.]
Austin Corporation issues $6,000,000 of 10%,10-year bonds,dated December 31,Year 1.The bonds are issued on April 30,Year 2,at 100 plus accrued interest.Interest on the bonds is payable semiannually each June 30 and December 31.
-The entry to record the issuance of bonds payable on April 30,Year 2,includes:

• A)A credit to Premium on Bonds Payable of $200,000.
• B)A debit to Cash of $150,000.
• C)A debit to Bond Interest Expense of $200,000.
• D)A credit to Bond Interest Payable of $200,000.

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