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.
Discount on bonds payable 115,829
Bonds Payable 1,000,000
Amount to be repaid at ...
This solution is comprised of journal entries for the first interest payment and the amortization of the related bond discount.