1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, Year 1. If an amount box does not require an entry, leave it blank. Cash 6114204 0 Discount on Bonds Payable 485796 0 Bonds Payable 0 6600000 2. Journalize the entries to record the following: If an amount box does not require an entry, leave it blank. a. The first semiannual interest payment on December 31, Year 1, and the amortization of the bond discount,
Bond Discount, Entries for Bonds Payable Transactions
On July 1, Year 1, Danzer Industries Inc. issued $6,600,000 of 5-year, 10% bonds at a market (effective) interest rate of 12%, receiving cash of $6,114,204. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year.
Required:
1.
| Cash | 6114204 | 0 | |
| Discount on Bonds Payable | 485796 | 0 | |
| Bonds Payable | 0 | 6600000 |
2. Journalize the entries to record the following: If an amount box does not require an entry, leave it blank.
a. The first semiannual interest payment on December 31, Year 1, and the amortization of the bond discount, using the straight-line method. (Round your answer to the nearest dollar.)
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