Question: On January 1, a company issues bonds dated January 1 with a par value of $360,000. The bonds mature in 5 years. The contract rate

On January 1, a company issues bonds dated January 1 with a par value of $360,000. 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 $374,613. The journal entry to record the first interest payment using straight-line amortization is:

Debit Bond Interest Expense $14,738.70; debit Premium on Bonds Payable $1,461.30; credit Cash $16,200.00.

Debit Bond Interest Expense $14,738.70; debit Discount on Bonds Payable $1,461.30; credit Cash $16,200.00.

Debit Bond Interest Expense $17,661.30; credit Discount on Bonds Payable $1,461.30; credit Cash $16,200.00.

Debit Bond Interest Expense $17,661.30; credit Premium on Bonds Payable $1,461.30; credit Cash $16,200.00.

Debit Interest Payable $16,200.00; credit Cash $16,200.00.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

Dell Computers is a leader in the computer industry with over $90 billion in sales each year. A recent annual report for Dell contained the following note: 1. Assume that estimated warranty costs for...

An employee earned $4,600 in February working for an employer Cumulative earnings of the previous pay periods are $1,800. The FICA tax rate for Social Security is 62% of the first $28.400 of earnings...

On January 1, a company issues bonds dated January 1 with a par value of $440,000. The bonds mature in 5 years. The contract rate is 11%, and interest is paid semiannually on June 30 and December 31....

1. On January 1, a company issues bonds dated January 1 with a par value of $370,000. The bonds mature in 5 years. The contract rate is 11%, and interest is paid semiannually on June 30 and December...

12. On January 1, a company issues bonds dated January 1 with a par value of $740,000. The bonds mature in 3 years. The contract rate is 10%, and interest is paid semiannually on June 30 and December...

On January 1 , a company issues bonds dated January 1 with a. par value of $400,000. The bonds mature in 5 years. The contract rate is 11%, and interest is paid semiannualy on June 30 and December 31...

21 On January 1, a company issues bonds dated January 1 with a par value of $300,000. The bonds mature in 5 years. The contract rate is 9%, and interest is paid semiannually on June 30 and December...

On January 1, a company issues bonds dated January 1 with a par value of $220,000. The bonds mature in 5 years. The contract rate is 9%, and interest is paid semiannually on June 30 and December 31....

Question 24 On January 1, a company issues bonds dated January 1 with a par value of $300,000. The bonds mature in 5 years. The contract rate is 9%, and interest is paid semiannually on June 30 and...

On January 1, a company issues bonds dated January 1 with a par value of $400,000. The bonds mature in 5 years. The contract rate is 7% and interestis paid semiannually on June 30 and December 31....

Tamra Corp. makes one product line. In February 2010, Tamra paid $530,000 in factory overhead costs. Of that amount, $124,000 was for Januarys factory utilities and $48,000 was for property taxes on...

Describe the impact of African American economics in the United States.

The PCAOB has the responsibility to Blank _ _ _ _ _ _ . More than one answer may be correct. Multiple select question. perform inspections of the practices of registered firms conduct investigations...

5. Develop a scenario comparing two PH programs and involving the use of a CBA.

Words and phrases can have connotative meanings not only in business communication but also in classroom communication. For each item in the following list, identify what a teacher might mean when he...

Global. Select a culture other than your own. Gather information on that cultures values, attitudes, biases, and viewpoints. As your instructor directs, interview a student or faculty member from...

Prepare a one- to two-minute oral presentation in which you explain the senders and receivers roles in the communication process. As your instructor directs, deliver your presentation to another...