Asked Feb 2, 2020

On the first day of the fiscal year, a company issues $2,000,000, 12%, five-year bond that pays semiannual interest of $120,000 ($2,000,000 x 12% x 1/2). Journalize the first interest payment and amortization of the related bond premium.


Expert Answer

Step 1

Compute present value of the bonds as shown below:


Accounting homework question answer, step 1, image 1


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