On January 1,2010,a company issued and sold a $400,000,7%,10-year bond payable and received proceeds of $396,000.Interest is payable each June 30 and December 31.The company uses the straight-line method to amortize the discount.The journal entry to record the first interest payment is:
A)

\begin{array} { | l | r | r | } \hline \text { Bond Interest Expense } & 14,000 & \\\hline \text { Cash } & & 14,000 \\\hline\end{array}

\begin{array}{|l|r|r|}\hline \text { Bond Interest Expense } & 28,000 & \\\hline \text { Cash } & & 28,000 \\\hline\end{array}

\begin{array}{|l|r|r|}\hline\text { Bond Interest Expense } & 14,200 & \\\hline \text { Cash } & & 14,000 \\\hline \text { Discount on Bonds Payable } & & 200\\\hline\end{array}

\begin{array} { | l | r | r | } \hline \text { Bond Interest Expense } & 13,800 & \\\hline \text { Discount on Bonds Payable } & 200 & \\\hline \text { Cash } & & 14,000 \\\hline\end{array}

\begin{array} { | l | r | r | } \hline \text { Bond Interest Experise } & 14,000 & \\\hline \text { Discount on Bonds Payable } & 200 & \\\hline \text { Cash } & & 14,200 \\\hline\end{array}

On January 1,2010,a Company Issued 10%,10-Year Bonds Payable with a Par

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Correct Answer:VerifiedCash payment: $720,000 x 10% x...View AnswerUnlock this answer nowGet Access to more Verified Answers free of chargeView Full Answer For Free

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