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On January 2,2014,Mahoney Sales Issued $10,000 in Bonds for $10,900 \begin{array} { | l | l | l | } \hline \quad\quad& \quad&\quad \\\hline & & \\\hline & & \\\hline\end{array}

question 146

Essay

On January 2,2014,Mahoney Sales issued $10,000 in bonds for $10,900.They were 5-year bonds with a stated rate of 4%,and pay semiannual interest payments.Mahoney Sales uses straight-line method to amortize bond premium.Please provide the journal entry for the first interest payment to be made on June 30,2014.
\begin{array} { | l | l | l | } \hline \quad\quad& \quad&\quad \\\hline & & \\\hline & & \\\hline\end{array}


Definitions:

Financing Activities

All transactions (other than interest payments) involving borrowing from creditors or repaying creditors as well as transactions with the company’s owners.

Cash Flow

The total amount of money being transferred into and out of a business, measuring its financial health.

Accounts Payable

Liabilities of a business representing money owed to creditors for goods and services received.

Accounts Receivable

Funds that customers owe to a business for products or services provided but have not yet been paid.

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