On the First Day of the Fiscal Year, a Company

question 60

Essay

On the first day of the fiscal year, a company issues a $800,000, 6%, 5 year bond that pays semi-annual interest of $24,000 ($800,000 × 6% × 1/2), receiving cash of $690,960. Journalize the entry to record the first interest payment and the amortization of the related bond discount using the straight-line method.

Identify transactions that are not reported in the cash flows but disclosed separately.

Know the sources of information required for preparing the statement of cash flows.

Understand the use of the statement of cash flows by managers.

Learn the impact of transactions and events on the end-of-period cash balance.

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Definitions:

The Amistad

A historical event in 1839 involving a successful revolt by enslaved Africans on the Spanish schooner La Amistad.

Historical Significance

The importance of an event, person, or place based on its impact on history.

Fugitive Slaves

Enslaved individuals who escaped from their enslavers in pursuit of freedom, often facing severe repercussions or the risk of recapture under laws like the Fugitive Slave Act.

Forbidden

Refers to something that is prohibited by law, rules, or by social or cultural norms.