On January 1, 2019, Castle Services issued $177,000 of six-year, 12% bonds when the market interest rate was 11%. The bonds were issued for $185,000. Castle uses the effective - interest method to amortize the bond premium. Semiannual interest payments are made on June 30 and December 31 of each year. Which of the following is the correct journal entry to record the first interest payment? (Round your answers to the nearest dollar number.) OA. Interest Expense Premium on Bonds Payable Cash OB. Interest Expense Cash OC. Interest Expense Discount on Bonds Payable Cash OD. Cash Premium on Bonds Payable Interest Expense 10,175 445 9,735 885 9,735 10,620 10,620 9,735 10,620 885 9,735

On January 1, 2019, Castle Services issued $177,000 of six-year, 12% bonds when the market interest rate was 11%. The bonds were issued for $185,000. Castle uses the effective - interest method to amortize the bond premium. Semiannual interest payments are made on June 30 and December 31 of each year. Which of the following is the correct journal entry to record the first interest payment? (Round your answers to the nearest dollar number.) OA. Interest Expense Premium on Bonds Payable Cash OB. Interest Expense Cash OC. Interest Expense Discount on Bonds Payable Cash OD. Cash Premium on Bonds Payable Interest Expense 10,175 445 9,735 885 9,735 10,620 10,620 9,735 10,620 885 9,735

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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