Question: Please answer the following question and show your work. Thank you very much for your help. On January 1, 2011, Air New Jersey Inc. issued

Please answer the following question and show your work. Thank you very much for your help.

On January 1, 2011, Air New Jersey Inc. issued $5000 in principal of 3-year bonds with a 3% stated interest rate and semi-annual payments (non-amortizing debt). The bond was sold at a $533 discount to par, which implied a 7% market interest rate. Which three of the following lines comprised the journal entry when Air New Jersey issued the bond to investors? Dr. Cash $4467 Cr. Debt payable $5533 Dr. Discount on Debt Payable $533 0 0 0 0 0 0 Dr. Discount Expense $533 Dr. Cash $5000 Cr. Debt payable $5000

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