On the first day of the fiscal year, a company issues a $2,900,000, 11%, 5-year bond that pays semiannual interest of $159,500 ($2,900,000 × 11% × ½), receiving cash of $3,129,468. Using straight-line amortization, journalize the first interest payment and the amortization of the related bond premium. Round to the nearest dollar.

On the first day of the fiscal year, a company issues a $2,900,000, 11%, 5-year bond that pays semiannual interest of $159,500 ($2,900,000 × 11% × ½), receiving cash of $3,129,468. Using straight-line amortization, journalize the first interest payment and the amortization of the related bond premium. Round to the nearest dollar.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter9: Long-term Liabilities

Section: Chapter Questions

Problem 15MCQ

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