On the First Day of the Fiscal Year, a Company

question 64

Essay

On the first day of the fiscal year, a company issues a $500,000, 8%, 10-year bond that pays semiannual interest of $20,000
($500,000 × 8% × 1/2), receiving cash of $520,000. Journalize the entry to record the first interest payment and amortization of premium using the straight-line method.

---

Definitions:

Plasma

The liquid component of blood, in which blood cells are suspended, containing proteins, electrolytes, and nutrients.

Serum

The clear, yellowish fluid that remains from blood plasma after clotting factors have been removed, used in diagnostic tests and treatments.

Lymphedema

Swelling typically in one of the arms or legs due to a blockage in the lymphatic system, preventing lymph fluid from draining well.

-edema

A suffix used in medical terminology to denote swelling or an accumulation of fluid in the tissues.