On January 1, 2017, Acme Sales issued $28,000 in bonds for $18,700. These are si
ID: 2511499 • Letter: O
Question
On January 1, 2017, Acme Sales issued $28,000 in bonds for $18,700. These are six-year bonds with a stated rate of 13% and pay semiannual interest. Acme Sales used the straight-line method to amortize the Bond Discount. Immediately after the issue of the bonds, the ledger balances appeared as follows:
Bonds Payable $28,000 (credit balance)
Discount on Bonds Payable $9,300 (debit balance)
After the second interest payment on December 31, 2017, what is the balance of Discount on Bonds Payable? (Round any intermediate calculations to two decimal places, and your inal answer to the nearest dollar)
Multiple Choice
credit of $9,300
debit of $8,525
debit of $10,075
debit of $7,750
Explanation / Answer
Discount on Bonds Payable amortized for 2 periods = 9300/12*2= $1550 Balance of Discount on Bonds Payable = 9300-1550= $7750 Option debit of $7,750 is correct