Issuing bonds at a discountOn the first day of the fiscal year, a company issues a $3,500,000, 6% five-year bond that pays semiannual interest of $105,000 ($3,500,000 x 6% x1/2), receiving cash of $3,350,000. Journalize the bond issuance.

Corporate Financial Accounting
14th Edition
ISBN:9781305653535
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter11: Liabilities: Bonds Payable
Section: Chapter Questions
Problem 11.2BE: Issuing bonds at a discount On the first day of the fiscal year, a company issues a 2,500,000, 4%,...
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Issuing bonds at a discount
On the first day of the fiscal year, a company issues a $3,500,000, 6% five-
year bond that pays semiannual interest of $105,000 ($3,500,000 x 6% x
1/2), receiving cash of $3,350,000. Journalize the bond issuance.

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