Question: QUESTION 8 On October 1, 2016 MK Corporation issues a bond for $110,000 cash. The bond has a face value of $100,000. Interest is paid

QUESTION 8

  1. On October 1, 2016 MK Corporation issues a bond for $110,000 cash. The bond has a face value of $100,000. Interest is paid quarterly. On January 1, 2017 the company records the following entry for the first contract interest payment:

    Interest expense

    5,500

    Premium

    500

    Cash

    6,000

    (to record interest expense)

    Which of the following would be included in the journal entry to record the next contract interest payment which the company pays in cash on April 1, 2017?

    DEBIT to Interest Expense for $5,500

    DEBIT to Interest Expense for $5,425

    DEBIT to Interest Expense for $5,475

    DEBIT to Interest Expense for $5,225

    DEBIT to Interest Expense for $5,525

    DEBIT to Interest Expense for $5,000

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