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

question 147

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:

Detriment

A loss or harm suffered as a result of an action or a decision.

Adequacy

The sufficiency of something in meeting a specific need or standard, often evaluated in terms of quality or quantity.

Consideration

The value promised to be transferred in a contract, making it legally binding.

Endorse

To give one's public approval or support to someone or something, or to sign a document thus validating it.