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On the First Day of the Fiscal Year, a Company

question 52

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 x 7% x 1/2), receiving cash of $884,171. Journalize the first interest payment and the amortization of the related bond discount using the straight-line method. Round answer to the nearest dollar.


Definitions:

Metropolitan Area Network (MAN)

A wide area network (WAN) that links users in a specific geographic area (such as within a city or county).

International Company

A business entity that operates in multiple countries apart from its home country, often involved in exporting and importing goods and services.

Connect Computers

The process of establishing a communication link between two or more computers so they can share resources, data, and applications.

IP Address

A distinct sequence of numerals divided by dots that specifies each device communicating via the Internet Protocol across a network.

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