On July 1, 2018, Snoopy Corporation issues $2,000,000 of 8-year bonds, 5% bonds that pay interest semi-annually. The selling price was for $2,134,655 when the market rate of interest was 4%. Snoopy Corporation uses the effective-interest method of amortization. Interest is paid each June 30 and December 31. The entry to record the first semi-annual interest payment on December 31, 2018, will include a:

Question

On July 1, 2018, Snoopy Corporation issues $2,000,000 of 8-year bonds, 5% bonds that pay interest semi-annually. The selling price was  for $2,134,655 when the market rate of interest was 4%. Snoopy Corporation uses the effective-interest method of amortization. Interest is paid each June 30 and December 31. The entry to record the first semi-annual interest payment on December 31, 2018, will include a:

Accepted Answer

debit to Interest Expense of $42,693

Answer

debit to Interest Expense of $50,000

Answer

credit to Bonds Payable for $42,693

Answer

credit to Interest Expense for $50,000

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On July 1, 2018, Snoopy Corporation issues $2,000,000 of 8-year bonds, 5% bonds ...

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