What the entry to record first semiannual interest payment

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Problem 1: On August 1, 2011, Tyler Corporation issues $3,000,000 of 10-year bonds dated August 1, 2011, at 101 when the market rate of interest is 8%. Tyler Corporation uses the effective-interest method of amortization and interest is paid each January 31, and July 31. The entry to record the first semiannual interest payment on January 31, 2012, will include

a: A.debit to Premium on Bonds Payable for $300,000.

B. debit to Interest Expense for $121,000.

C. credit to Premium on Bonds Payable for $240,000.

D. debit to Interest Expense for $20,000

Reference no: EM132933133

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