On january 1, a company issues bonds dated january 1 with a par value of $600,000. the bonds mature in 3 years. the contract rate
On January 1, a company issued bonds with a par value of $600,000, maturing in 3 years. The bonds have a contract rate of 7%, with interest paid semiannually on June 30 and December 31. The bonds were sold for $564,000. What is the journal entry to record the first interest payment using straight-line amortization?
a) Debit interest expense $15,000; debit discount on bonds payable $6,000; credit cash $21,000.
b) Debit interest expense $21,000; credit cash $21,000.
c) Debit interest payable $21,000; credit cash $21,000.
d) Debit interest expense $21,000; credit premium on bonds payable $6,000; credit cash $15,000.
e) Debit interest expense $27,000; credit discount on bonds payable $6,000; credit cash $21,000.
7 Answers
Feb 20, 2025
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