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On 1 April, Year 1, Greenway Corporation Issues $20 Million

Question 146

Multiple Choice

On 1 April, year 1, Greenway Corporation issues $20 million of 10%, 20-year bonds payable at par. Interest on the bonds is payable semiannually each 1 April and 1 October.
-The journal entry to record the first cash payment to bondholders on 1 October, year 1, will include:


A) A credit to Cash of $2,000,000.
B) A debit to Bonds Payable of $1,000,000.
C) A debit to Interest Expense of $1,000,000
D) A credit to Interest Payable of $1,000,000.

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