The following events occurred during the first half of the year. Book the entries necessary for the corresponding transactions that have occurred. January 22: Issued $75,000 of 6% term bonds due on January 1, 2025 (10 periods) with interest payable each June 30 and December 31. Investors require an effective interest rate of 8%. Record the entries for the issuance of the bond.
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
The following events occurred during the first half of the year. Book the entries necessary for the corresponding transactions that have occurred.
January 22: Issued $75,000 of 6% term bonds due on January 1, 2025 (10 periods) with interest payable each June 30 and December 31. Investors require an effective interest rate of 8%. Record the entries for the issuance of the bond.
22-Jan
Dr. Cash $71,250.00
Dr. Discount on Bond Payable $3,750.00 (=D8*(8%-6%)/2*(10/2))
Cr. Bond Payable $75,000.00
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