Exhibit 14-7 On January 1, 2014, Jewels, Inc. sold $200,000 of its 12% five-year bonds to yield 10%. Interest is paid each January 1 and July 1, and effective interest amortization is used. On May 1, 2016, Jewels, retired $100,000 of the bonds at 104. The book value of the bonds on December 31, 2015, was $212,926.
-Refer to Exhibit 14-7. Which of the following would be included in the interest accrual entry on May 1, 2016?
A) credit to Interest Payable for $3,333
B) debit to Bond Interest Expense for $3,549
C) credit to Discount on Bonds Payable for $4,259
D) debit to Premium on Bonds Payable for $451
Correct Answer:
Verified
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