On the First Day of the Fiscal Year, a Company

question 179

Essay

On the first day of the fiscal year, a company issues a $1,000,000, 7%, 5 year bond that pays semi-annual interest of $35,000 ($1,000,000 × 7% × 1/2), receiving cash of $884,171. Journalize the entry to record the issuance of the bonds.

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Definitions:

University Endowment Funds

Pools of capital that are donated to universities, which are then invested to generate income for ongoing university expenses and projects.

Successful

The achievement of specified goals or objectives, often used to describe individuals or entities that have attained a high level of accomplishment or profitability.

Best Efforts

A commitment to perform to the best of one's capabilities but without guaranteeing a specific outcome.

Common Stock

A type of equity security that represents ownership in a corporation and entitles the holder to vote at shareholders' meetings.