On January 1, a company issues bonds dated January 1 with a par value of $280,000 The bonds mature in 5 years The contract rate is 9 , and interest is paid semiannually on June 30 and December 31 The market rate is 8 and the bonds are sold for $291,365 The journal entry to record the first interest payment using straight line amortization is (Rounded to the nearest dollar ) Multiple Choice Debit Interest Payable $12,600 credit Cash $12,600 Debit Bond Interest Expense $13,737 credit Premium on Bonds Payable $1,137 credit Cash $12,600 Debit Bond Interest Expense $11,463 debit Discount on Bonds Payable $1,137 credit Cash $12,600 Debit Bond Interest Expense $11,463 debit Premium on Bonds Payable $1,137 credit Cash $12,600 Debit Bond Interest Expense $13,737 credit Discount on Bonds Payable $1,137 credit Cash $12,600

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Question: On January 1, a company issues bonds dated January 1 with a par value of $280,000. The bonds mature in 5 years. The contract rate

On January 1, a company issues bonds dated January 1 with a par value of $280,000. The bonds mature in 5 years. The contract rate is 9%, and interest is paid semiannually on June 30 and December 31. The market rate is 8% and the bonds are sold for $291,365. The journal entry to record the first interest payment using straight-line amortization is: (Rounded to the nearest dollar.)

Multiple Choice

Debit Interest Payable $12,600; credit Cash $12,600.
Debit Bond Interest Expense $13,737; credit Premium on Bonds Payable $1,137; credit Cash $12,600.
Debit Bond Interest Expense $11,463; debit Discount on Bonds Payable $1,137; credit Cash $12,600.
Debit Bond Interest Expense $11,463; debit Premium on Bonds Payable $1,137; credit Cash $12,600.
Debit Bond Interest Expense $13,737; credit Discount on Bonds Payable $1,137; credit Cash $12,600.

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