Hicks Corporation issued $500,000 of 5%, 10-year bonds payable at a price of 92.

The market interest rate at the date of issuance was 6%, and the bonds pay interest semiannually. The journal entry to record the first semiannual interest payment using the effective-interest amortization method is

Transcribed Image Text:

Date a. Interest Expense Accounts and Explanation Discount on Bonds Payable Cash b. Interest Expense C. d. Discount on Bonds Payable Cash Interest Expense Discount on Bonds Payable Cash Interest Expense Discount on Bonds Payable Cash Debit 14,500 13,800 17,000 16,300 Credit 2,000 12,500 1,300 12,500 2,000 15,000 1,300 15,000