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:

NaOH

Sodium hydroxide, a strong base used in various chemical reactions and industrial applications.

Ag(NH3)2+

The diamminesilver(I) ion, a complex ion used in the Tollens' test for aldehyde detection, indicating the presence of an aldehyde group when it reduces to metallic silver.

H2CrO4

Chromic acid, a potent oxidizing agent utilized in organic chemistry for the oxidation of alcohols.

Br2/CCl4

A reagent combination used in organic chemistry for adding bromine across double bonds in a non-polar solvent, carbon tetrachloride.