On the first day of the fiscal year, a company issues a $2,500,000, 12%, 7-year bond that pays semiannual interest of $150,000 ($2,500,000 × 12% × ½), receiving cash of $2,387,327. Journalize the bond issuance. If an amount box does not require an entry, leave it blank.

On the first day of the fiscal year, a company issues a $2,500,000, 12%, 7-year bond that pays semiannual interest of $150,000 ($2,500,000 × 12% × ½), receiving cash of $2,387,327. Journalize the bond issuance. If an amount box does not require an entry, leave it blank.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 5MC: On January 1, a company issued a 5-year $100,000 bond at 6%. Interest payments on the bond of $6,000...

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Question

Issuing Bonds at a Discount
On the first day of the fiscal year, a company issues a
$2,500,000, 12%, 7-year bond that pays semiannual
interest of $150,000 ($2,500,000 × 12% × ½), receiving
cash of $2,387,327.
Journalize the bond issuance. If an amount box does not
require an entry, leave it blank.

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