Question

Question 3 Answer A and B

A
Issuing Bonds at a Discount On the first day of the fiscal year, a company issues a $7,600,000, 6%, 6-year bond that pays semiannual interest of $228,000 ($7,600,000 6% x 12), receiving cash of $6,886,734. Journalize the bond issuance. If an amount box does not require an entry, leave it blank. Cash Discount on Bonds Payable Bonds Payable
B

Answer 1

ЗА Cash $6,886,734 Discount on Bonds Payable Bonds payable 713,266 $ 7,600,000 ЗВ S 321,007 Interest Expense Discount on Bonds Payable $ 58,993 380,000 Cash Working Notes: Discount on Bonds payable = $7,600,000-$6.886,734 $713,266 ЗА ЗВ Discount on bonds payable in total $7,600,000-S7,128,057 = $471,943 Discount on bonds payable half year = $471,943/8 = $58,993 Interest Expense= $380,000-$58,993 $321,007 33