Webster 's entry at June 30,2019,to record the first semiannual payment of interest and amortization of discount on the bonds includes a:
A)Debit to Bond Interest Expense of $30,000.
B)Credit to Cash of $33,000.
C)Debit to Discount on Bonds Payable of $3,000.
D)Debit to Bond Interest Expense of $33,000.

Question

Quizplus · Accepted Answer

The semiannual payment includes both interest and amortization of discount, therefore, the entry should debit Bond Interest Expense for the total payment of $33,000. The cash payment should be credited for the same amount. Additionally, the amortization of discount should be recorded, but as a debit to Discount on Bonds Payable for $3,000. Therefore, the best choice is D, which includes both the debit to Bond Interest Expense and the debit to Discount on Bonds Payable, as well as the credit to Cash.

Webster 'S Entry at June 30,2019,to Record the First Semiannual