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A Corporation Issues $500,000, 8%, 5-Year Bonds on January 1

Question 88

Multiple Choice

A corporation issues $500,000, 8%, 5-year bonds on January 1, 2018, for $479,000. Interest is paid annually on January 1. If the corporation uses the straight-line method of amortization of bond discount, the amount of bond interest expense to be recognized in December 31, 2018's adjusting entry is


A) $44,200.
B) $40,000.
C) $35,800.
D) $4,200.

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