Problem regarding effective interest method

Reference no: EM13130700

Quail issued $200,000 of its 10-year 12% bonds for $224,924 on October 1, 2010. The effective rate on the bonds was 10% and interest is paid each October 1 and April 1. Assuming Quail uses the effective interest method, the adjusting entry on December 31, 2010, would include a

A) Debit to Premium on Bonds for $1250

B) Credit to Interest Payable for $5,623

C) Credit to Interest Payable for $6,000

D) Debit to Interest Expense for $6,623

Reference no: EM13130700

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Problem regarding effective interest method : Quail issued $200,000 of its 10-year 12% bonds for $224,924 on October 1, 2010. The effective rate on the bonds was 10% and interest is paid each October 1 and April 1. Assuming Quail uses the effective interest method, the adjusting entry on Dece..

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