Given the following information from an amortization table for December 31, prepare the journal entry to record the payment of interest at year end if the fiscal year of the company ends on December 31
6% Cash
Interest
7% Effective
Interest
Discount
Amortization
Carrying
Value
$42,000
$46,991
$4,991
$676,288
A) Journal Entry
Account
Debit
Credit
December 31
Interest Expense
46,991
Premium on Bonds Payable
4,991
Interest Payable
42,000
B) Journal Entry
Account
Debit
Credit
December 31
Interest Expense
46,991
Premium on Bonds Payable
4,991
Cash
42,000
C) Journal Entry
Account
Debit
Credit
December 31
Interest Expense
46,991
Discount on Bonds Payable
4,991
Interest Payable
42,000
D) Journal Entry
Account
Debit
Credit
December 31
Interest Expense
46,991
Discount on Bonds Payable
4,991
Cash
42,000
Answer: B
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