A Company Issues 9% Bonds with a Par Value of $100,000

Multiple Choice

A company issues 9% bonds with a par value of $100,000 at par on April 1, which is 4 months after the most recent interest date. The journal entry to record the bond issue includes a:

A) $100,000 debit to Cash.
B) $3,000 debit to Interest Expense.
C) $100,000 credit to Bonds Payable.
D) $103,000 credit to Bonds Payable.
E) $3,000 debit to Interest PayablE.$100,000 * .09 * 4/12 year = $3,000 accrued interest