Discount AmortizationOn the first day of the fiscal year, a company issues a \$6,700,000, 12%, 4-year bond that pays semiannual interest of \$402,000 (\$6,700,000 × 12% × ½), receiving cash of \$6,111,341.Journalize the first interest payment and the amortization of the related bond discount. Round to the nearest dollar. If an amount box does not require an entry, leave it blank.

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Discount Amortization
On the first day of the fiscal year, a company issues a \$6,700,000, 12%, 4-year bond that pays semiannual interest of \$402,000 (\$6,700,000 × 12% × ½), receiving cash of \$6,111,341.
Journalize the first interest payment and the amortization of the related bond discount. Round to the nearest dollar. If an amount box does not require an entry, leave it blank.

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Step 1

Calculate the amount of discount provided on issue of bonds as follows:

Step 2

Calculate the amount of discount on bonds...

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