Safeway Company Issued $100,000 of Fixed Interest Rate Bonds Payable

Multiple Choice

Safeway Company issued $100,000 of fixed interest rate bonds payable at 98.At year-end,the bonds were selling in the bond market at 99.What entry would Safeway make at year-end to record the change in selling price?

A) Debit Bonds Payable $1,000; credit Interest Expense $1,000.
B) Debit Interest Expense $1,000; credit Bonds Payable $1,000.
C) Debit Investment in Bonds $1,000; credit Investment Revenue $1,000.
D) No entry needed.