On the first day of the current fiscal year, $1,500,000 of 10-year, 8% bonds, with interest payable semiannually, were sold for $1,225,000. Present entries to record the following transactions for the current fiscal year (for the issuer’s books): (a)Issuance of the bonds.(b)First semiannual interest payment.(c)Amortization of bond discount for the year, using the straight-line method of amortization.(for each Journal Entry, omit the step of providing a brief explanation)JOURNAL Date Post. DR CR(a) (b) (c)

Solution: S.no Particulars Debit Credit (a) Cash A/C Dr. $1,225,000 Discount on bonds…

On the first day of the current fiscal year, $1,500,000 of 10-year, 8% bonds, with interest payable semiannually, were sold for $1,225,000. Present entries to record the following transactions for the current fiscal year (for the issuer’s books):

On the first day of the current fiscal year, $1,500,000 of 10-year, 8% bonds, with interest payable semiannually, were sold for $1,225,000. Present entries to record the following transactions for the current fiscal year (for the issuer’s books):

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter9: Long-term Liabilities

Section: Chapter Questions

Problem 7MCQ

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Question

(a)	Issuance of the bonds.
(b)	First semiannual interest payment.
(c)	Amortization of bond discount for the year, using the straight-line method of amortization.

(for each Journal Entry, omit the step of providing a brief explanation)

JOURNAL Date Post. DR CR
(a)



(b)


(c)

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