On January 1, 2022, Mattech Corp (reports using IFRS) issued 3,000 of its 6%, $1,000 bonds for $2,756,661 to yield 8%. Interest is payable on June 30 and December 31. These bonds were to mature on January 1, 2027 but were callable at 100 (face value) any time. After a sudden decrease in interest rates it was decided to redeem the entire bond issue on July 1, 2022 after payment of interest on June 30, 2022.

Record the journal entry for  the payment of interest on June 30, 2022 

The journal entry to record the payment of interest on June 30, 2022 would have been:

a.(dr) interest expense $204,334; (cr) cash $180,000; (cr) bonds payable $24,334

 

 

b.(dr) interest expense $110,266; (cr) cash $90,000; (cr) bonds payable $20,266

 

 

c.(dr) interest expense $180,000; (cr) cash $180,000

 

 

d.(dr) interest expense $114,334; (cr) cash $90,000; (cr) bonds payable $24,334

 

 

e.(dr) interest expense $90,000; (cr) cash $90,000