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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