at a Discount On the first day of the fiscal year, a company issues a $4,200,000, 10%, five-year bond that pays semiannual interest of $210,000 ($4,200,000 x 10 % x %), receiving cash of $4,041,710. Journalize the entry to record the issuance of the bonds. If an amount box does not require an entry, leave it blank. Cash Discount on Bonds Payable Bonds Payable Feedback Check My Work ✓

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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**Issuing Bonds at a Discount**

On the first day of the fiscal year, a company issues a $4,200,000, 10%, five-year bond that pays semiannual interest of $210,000 ($4,200,000 x 10% x ½), receiving cash of $4,041,710.

Journalize the entry to record the issuance of the bonds. If an amount box does not require an entry, leave it blank.

- **Cash**

- **Discount on Bonds Payable**

- **Bonds Payable**

**Feedback:**

- [Check My Work]
Transcribed Image Text:**Issuing Bonds at a Discount** On the first day of the fiscal year, a company issues a $4,200,000, 10%, five-year bond that pays semiannual interest of $210,000 ($4,200,000 x 10% x ½), receiving cash of $4,041,710. Journalize the entry to record the issuance of the bonds. If an amount box does not require an entry, leave it blank. - **Cash** - **Discount on Bonds Payable** - **Bonds Payable** **Feedback:** - [Check My Work]
Expert Solution
Step 1: Meaning of bonds

Bonds means the instrument where the bond holder gives money to bond issuer and in return bond issuer gives interest to bonds holder during the life time of bonds and return the money on maturity to bond holder. When bonds are issued at more than face value , then it is issued at premium. When bonds are issued at less than face value , then it is issued at discount.

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