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On the first day of the fiscal year, a company issues a $990,000, 9%, 5-year bond...

On the first day of the fiscal year, a company issues a $990,000, 9%, 5-year bond that pays semiannual interest of $44,550 ($990,000 x 9% × 1/2), receiving cash of $884,177. Journalize the entry to record the issuance of the bonds.

If an amount box does not require an entry, leave it blank.
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Answer #1

The journal entry to record the issuance of bond

Accounts Tittles and explanations

Debit ($)

Credit ($)

Cash A/c

884,177

Discount on Bond Payable A/c [$990,000 - $884,177]

105,823

      To Bond Payable A/c

990,000

[Being the journal entry passed to record the issuance of bond]

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