On August 1,2013,a Company Issues Bonds with a Par Value

question 191

Essay

On August 1,2013,a company issues bonds with a par value of $600,000.The bonds mature in 10 years and pay 6% annual interest,payable each February 1 and August 1.The bonds sold at $632,000.The company uses the straight-line method of amortizing bond premiums and discounts.The company's year-end is December 31.Prepare the general journal entry to record the interest accrued at December 31,2013.

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Definitions:

Total Cost

The sum of all funds utilized in the production of goods or services, including both fixed and variable costs.

Marginal Cost

The rise in overall manufacturing expenses resulting from the creation of an extra unit.

Quantity of Output

The amount of goods or services produced by a company, sector, or economy within a specific period.

Average Total Cost

The total cost of production divided by the quantity of output produced, representing the average cost per unit of output.