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Question
On January 1, 2013, Jacob issues $800,000 of 9%, 13-year bonds at a price of 96. Six years later, on January 1, 2019, Jacob retires 20% of these bonds by buying them on the open market at 105 . All interest is accounted for and paid through December 31, 2018, the day before the purchase. The straight-line method is used to amortize any bond discount or premium. What is the journal entry to record the first semiannual interest payment on June 30, 2013?
A.
| Interest Expense | 36,000 | |
| Cash | 36,000 |
B.
| Cash | 36,000 | |
| Interest Expense | 36,000 |
C.
| Interest Expense | 36,000 | |
| Discount on Bonds Payable | 1,077 | |
| Cash | 37,077 |
D.
| Interest Expense | 36,000 | |
| Premium on Bonds Payable | 1,077 | |
| Cash | 37,077 |
E.
| Interest Expense | 37,077 | |
| Discount on Bonds Payable | 1,077 | |
| Cash | 36,000 |
Answer
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Related questions
Q:
Periods
12 Percent 1
8929 2
1.6901 3
2.4018 4
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Q:
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Q:
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C. A quarterly period separated into weekly budgets.
D. An annual period separated into weekly budgets.
E. An annual period separated into quarterly and monthly budgets.
Q:
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C. Solely by the budget committee.
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E. After the accounting period has begun.
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