On the first day of the fiscal year, a company issues an $946,000,8%, 5-year bond that...

Question

Question

Answer 1

Answer #1

Journal Entry:

Explanation:

1) Discount on Bond Payable:

=$ 946,000 - $889,240

= $ 56,760

2) No of periods:

= 5 year × 2( semi annual)

= 10

3) Amortization ( using straight line method)

= $ 56,760 ÷ 10

= $ 5676

Answer 2

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