On April 1, a Company Issues 6%, 10-Year, $600,000 Par

question 159

Essay

On April 1, a company issues 6%, 10-year, $600,000 par value bonds that pay interest semiannually each March 31 and September 30. The bonds sold at $592,000. The company uses the straight-line method of amortizing bond discounts. Prepare the general journal entry to record the first interest payment on September 30.

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Definitions:

Mortgage

A transfer of an interest in property for the purpose of creating a security for a debt.

Partnership Property

Assets purchased or acquired for the purpose of the partnership business, jointly owned by all partners according to the partnership agreement.

Legal Position

The stance or argument taken on a legal issue, often based on laws, precedents, and principles.

Partnership

A legal form of business operation between two or more individuals who share management and profits.