Blanding Company issues $1 000 000 of 8%, 10- year debentures at 98 on 28 February 2014. The debenture pays interest on 28 February and 31 August. The market rate of interest on the issue date was 10%. Assume Blanding uses the straight- line method for amortisation. The journal entry to record the first interest payment on 31 August 2014 would be a:
A)debit to Discount on debentures payable for $1 000.
B)debit to Cash for $40 000.
C)debit to Interest expense for $39 000.
D)debit to Interest expense for $41 000.

Question

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The Answer of Blanding Company issues $1 000 000 of 8%, 10- year debentures at 98 on 28 February 2014. The debenture pays interest on 28 February and 31 August. The market rate of interest on the issue date was 10%. Assume Blanding uses the straight- line method for amortisation. The journal entry to record the first interest payment on 31 August 2014 would be a:
A)debit to Discount on debentures payable for $1 000.
B)debit to Cash for $40 000.
C)debit to Interest expense for $39 000.
D)debit to Interest expense for $41 000.

Blanding Company Issues $1 000 000 of 8%, 10- Year