1.method of amortization and interest is paid each January 31, and July 31. Assuming no adjusting entries have been made to record interest expense, the entry to record the first semiannual interest payment on
January 31, 2012, will include a:
A)debit to Premium on Bonds Payable for $30,000.
B)debit to Interest Expense for $121,000.
C)credit to Premium on Bonds Payable for $240,000.
D)debit to Interest Expense for $120,000.

Question

Quizplus · Accepted Answer

The entry to record the first semiannual interest payment would include a debit to Interest Expense for the amount of interest accrued over the period. Since no adjusting entries have been made, the full interest expense for the period needs to be recorded.

1Method of Amortization and Interest Is Paid Each January 31