Question

On the first day of the fiscal year, a company issues a $1,100,000, 9%, 10-year bond...

On the first day of the fiscal year, a company issues a $1,100,000, 9%, 10-year bond that pays semiannual interest of $49,500 ($1,100,000 × 9% × ½), receiving cash of $1,031,460.

Journalize the bond issuance. If an amount box does not require an entry, leave it blank.

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Answer #1

Based on the information available in the question, we can answer as follows:-

Particulars Debit Credit
January 1 Cash A/c                       1,031,640
Discount on Bonds payable A/c                            68,360
              To Bonds Payable A/c                      1,100,000
(To record the issuance of bonds)

Please let me know if you have any questions via comments and all the best :) !

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