On the first day of the fiscal year, a company issues a $3,000,000, 11%. five-year bond that pays semiannual interest of $165,000 ($3,000,000 x 11% x ½), receiving cash of $2,889,599. (1) Before you even make the journal entry, can you tell whether the bond is being issued at face value, a discount, or a premium? If so, how? (2) Please journalize the bond issuance.

On the first day of the fiscal year, a company issues a $3,000,000, 11%. five-year bond that pays semiannual interest of $165,000 ($3,000,000 x 11% x ½), receiving cash of $2,889,599. (1) Before you even make the journal entry, can you tell whether the bond is being issued at face value, a discount, or a premium? If so, how? (2) Please journalize the bond issuance.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 7MC: On January 1 a company issues a $75,000 bond that pays interest semi-annually. The first interest...

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