On the First Day of the Current Fiscal Year, $2,000,000

question 78

Essay

On the first day of the current fiscal year, $2,000,000 of 10-year, 7% bonds, with interest payable annually, were sold for $2,125,000. Present entries to record the following transactions for the current fiscal year. (a) Issuance of the bonds.
(b) First annual interest payment (record as separate entry from premium amortization).
(c) Amortization of bond premium for the year, using the straight-line method of amortization.

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Definitions:

Major Organic

Refers to the primary organic (carbon-containing) compound or product resulting from a chemical reaction.

Alkene

A hydrocarbon containing at least one carbon-carbon double bond, part of the unsaturated hydrocarbon family.

Compound

A substance formed when two or more chemical elements are chemically bonded together.

Stereochemical Detail

Pertains to the spatial arrangement of atoms within molecules and how this affects the properties and reactions of those molecules.