Share
Explore BrainMass

Journalize first interest payment and the amortization

On the first day of the fiscal year, a company issues a $1,000,000, 8% 5 year bond that pays semi-annual interest of $40,000 ($1,000,000 x 8% x 1/2), receiving cash of $884,171. Journalize the first interest payment and the amortization of the related bond discount. Round answer to the nearest dollar.

Solution Preview

Cash 884,171
Discount on bonds payable 115,829
Bonds Payable 1,000,000

Amount to be repaid at ...

Solution Summary

This solution is comprised of journal entries for the first interest payment and the amortization of the related bond discount.

$2.19