On the First Day of the Current Fiscal Year, $1,500,000

question 159

Essay

On the first day of the current fiscal year, $1,500,000 of 10-year, 8% bonds, with interest payable semiannually, were sold for $1,225,000. Present entries to record the following transactions for the current fiscal year:
(a)Issuance of the bonds.
(b)First semiannual interest payment
(record as separate entry from discount amortization).
(c)Amortization of bond discount for the year, using the straight-line method of amortization.

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Definitions:

Higher-Order Needs

Refers to psychological needs that are related to the self-actualization and personal growth of an individual, as highlighted in Maslow's hierarchy of needs.

Benevolents

Individuals who exhibit a disposition to do good and to act with kindness and charity.

Equity Ratio

A financial metric that measures the proportion of a company’s total assets that are financed by shareholders' equity, indicating financial stability.

Frederick Taylor

A mechanical engineer who founded the scientific management movement, emphasizing efficiency, labor productivity, and systematic organization of work.