On January 1,2013,Jacob Issues $600,000 of 11%,15-Year Bonds at a Price

question 112

Multiple Choice

On January 1,2013,Jacob issues $600,000 of 11%,15-year bonds at a price of 102½.What is the journal entry to record the issuance of these bonds?

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Definitions:

Impairment Tests

Assessments to determine if an asset's carrying amount exceeds its recoverable amount, indicating a loss in value.

Fair Value

A measure of the estimated price at which an asset or liability could be traded in a transaction between willing parties, other than in a liquidation sale.

FASB

stands for Financial Accounting Standards Board, an independent organization responsible for establishing accounting and financial reporting standards for companies and nonprofits in the United States.

Orderly Transaction

A financial transaction conducted in an organized manner without urgent pressure from either the buyer or seller, often ensuring fair market values are achieved.