Answered: nstructions On the first day of the…

nstructions On the first day of the fiscal year, a company issues a $5,000,000, 7%, five-year bond that pays semiannual interest of $175,000 ($5,000,000 x 7% x %), receiving cash of $5,400,000.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

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signment/takeASsignmentMain.do?invoker=&takeAssignmentSessionLocator=&inprogress-false
Issuing bonds at a premium
Instructions
Chart of Accounts
Journal
Instructions
On the first day of the fiscal year, a company issues a $5,000,000, 7%, five-year bond that pays semiannual interest of $175,000 ($5,000,000 x 7% x %), receiving cash of $5,400,000.
Journalize the bond issuance on January 1. Refer to the Chart of Accounts for exact wording of account titles.

Expert Solution

Concept

Bond is a instrument which has a fixed income and is issued by the borrower, one needs the money to the investor, one who invest money in the bonds.

They are usually issued by the companies, governments , etc.to finance the projects.

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