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Question
On January 1, 2013, Jacob issues $600,000 of 11%, 15-year bonds at a price of 102. The straight-line method is used to amortize any bond discount or premium. What is the journal entry to record the first interest semi-annual interest payment on June 30, 2013?
A.
| Interest Expense | 33,000 | |
| Cash | 33,000 |
B.
| Cash | 33,000 | |
| Interest Expense | 33,000 |
C.
| Interest Expense | 32,500 | |
| Discount on Bonds Payable | 500 | |
| Cash | 33,000 |
D.
| Interest Expense | 32,500 | |
| Premium on Bonds Payable | 500 | |
| Cash | 33,000 |
E.
| Interest Expense | 33,000 | |
| Discount on Bonds Payable | 500 | |
| Cash | 32,500 |
Answer
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