The company uses the straight-line method to amortize

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On January 1, a company issued and sold a $394,000, 9%, 10-year bond payable, and received proceeds of $389,000. Interest is payable each June 30 and December 31. The company uses the straight-line method to amortize the discount. The journal entry to record the first interest payment is (closest to):
Debit Bond Interest Expense $35,460; credit Cash $35,460.
Debit Bond Interest Expense $17,730; credit Cash $17,730.
Debit Bond Interest Expense $17,480; debit Discount on Bonds Payable $250; credit Cash $17,730. (wrong choice)
Debit Bond Interest Expense $17,730; debit Discount on Bonds Payable $250; credit Cash $17,980.
Debit Bond Interest Expense $17,980; credit Cash $17,730; credit Discount on Bonds Payable $250.

Reference no: EM13336103

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