Magenta Corporation issued $500,000 of its 6%, 10-year bonds, dated January 1, 2016, at face...
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Accounting
Magenta Corporation issued $500,000 of its 6%, 10-year bonds, dated January 1, 2016, at face value plus accrued interest on September 1, 2016. Interest is paid on June 30 and December 31. Magenta uses the most common method to record the sale of the bonds between interest payment periods.
Refer to Exhibit 14-7. The entry to record the sale would include a
a) credit to Bonds Payable for $520,000
b) debit to Cash for $505,000
c) debit to Interest Expense for $20,000
d) credit to Interest Expense for $20,000
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