On January 1, 2010, Choice Co. issued a $100,000, 12%, 5-year bond for $100,000 to Morgan Corp. Interest payments are made annually on December 31. On January 1, 2012, Morgan Corp. sold the bond to Goldman Group for $105,000. On January 1, 2012, Choice Co. should make
A) no entry.
B) an entry to record a gain of $5,000.
C) an entry to split the gain with Morgan Corp.
D) an entry to record interest expense of $24,000 and a gain of $29,000.
E) an entry to record interest payable of $24,000 and a loss of $19,000.
Correct Answer:
Verified
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