Concept explainers
Whirlie Inc. issued $300,000 face value, 10% paid annually, 10-year bonds for $319,251 when the market of interest was 9%. The company uses the effective-interest method of amortization. At the end of the year, the company will record ________.
A. a credit to cash for $28,733
B. a debit to interest expense for $31,267
C. a debit to Discount on Bonds Payable for $1,267
D. a debit to Premium on Bonds Payable for $1.267
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