Asked by ZnonEmpire candy on Jul 01, 2024
Verified
On the first day of the fiscal year, a company issues a $500,000, 8%, 10-year bond that pays semiannual interest of $20,000 ($500,000 × 8% × 1/2), receiving cash of $530,000. Journalize the entry to record the issuance of the bonds.
Semiannual Interest
Interest that is calculated and paid twice a year, often used in the context of bonds or loans.
Fiscal Year
A 12-month period used for calculating annual financial statements in businesses and other organizations, which may or may not align with the calendar year.
- Digest the procedure and financial treatment concerning the issuance of bonds, taking into account both par and non-par circumstances (discount/premium).
Verified Answer
JB
Learning Objectives
- Digest the procedure and financial treatment concerning the issuance of bonds, taking into account both par and non-par circumstances (discount/premium).