With respect to this bond issue,Greenway's balance sheet at December 31,Year 1,will include:
A)Bonds payable of $20,500,000.
B)Bonds payable of $19,500,000.
C)Bonds payable of $20 million,as well as interest payable of $1,500,000.
D)Bonds payable of $20 million,as well as interest payable of $500,000.

Question

Quizplus · Accepted Answer

The correct answer is D because the bonds payable will be recorded at their face value of $20 million, and the interest payable will be recorded separately. The interest payable is calculated based on the interest rate and the period it covers, which in this case appears to be $500,000, indicating that the interest for the period until December 31, Year 1, has been accrued but not yet paid.

With Respect to This Bond Issue,Greenway's Balance Sheet at December