Company X issues 100 bonds totaling $100,000 on January 1st, 2022 at 3% interest when the market rate is 4%. The bond term is 10 years. The interest will be paid on January 1, 2023. The adjusting journal entry to recognize the interest on December 31st will include: 1. Debit to Interest Expense for $3,676 2. Debit to Bonds for $3,000. 3. Credit to Cash for $3,676. 4. Debit to Discount for $3000. 01 02 0 3 04

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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Company X issues 100 bonds totaling $100,000 on January 1st, 2022 at 3% interest when the market rate is 4%. The
bond term is 10 years. The interest will be paid on January 1, 2023. The adjusting journal entry to recognize the interest
on December 31st will include:
1. Debit to Interest Expense for $3,676
2. Debit to Bonds for $3,000.
3. Credit to Cash for $3,676.
4. Debit to Discount for $3000.
0 1
2
3
04
Transcribed Image Text:Company X issues 100 bonds totaling $100,000 on January 1st, 2022 at 3% interest when the market rate is 4%. The bond term is 10 years. The interest will be paid on January 1, 2023. The adjusting journal entry to recognize the interest on December 31st will include: 1. Debit to Interest Expense for $3,676 2. Debit to Bonds for $3,000. 3. Credit to Cash for $3,676. 4. Debit to Discount for $3000. 0 1 2 3 04
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