tMaindo?invoker-assignments&takeAssignments; nment-take&inprogresse; false On th

Question

tMaindo?invoker-assignments&takeAssignments; nment-take&inprogresse; false On the first day of the fiscal year, a company issues a $1,000,000 7%, five-year bond that pas semian ual interest r s35,000 s,oooooo 1/2), recelving cash of $884,171. Journalize the first interest payment and the amortization of the related bond discount using the straight-line methed. Round answers to the nearest dollar If an amount box does not require an entry, leave it blank Interest Expense ?? Bonds Payable P? rt sc delete home ed 0

Explanation / Answer

Amount of discount: 1,000,000 – 884,171 = $115,829

Amount of amortization for each semi-annual period 115,829/10 = $11,583

Amount interest paid = 1,000,000*0.07*0.5 = $35,000

General Journal Debit Credit Interest expense $46,583 Discount on Bonds Payable $11,583 Cash $35,000

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