On January 1, a company issued and sold a $399,000, 9%, 10-year bond payable, and received proceeds of $394,000. Interest is payable each June 30 and December 31. The company uses the straight-line method to amortize the discount. The journal entry to record the first interest payment is:

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cloyd.grady · Accepted Answer

Answer:Cash Interest payable on Bond = $399,000*4.5% = $17,955Discount to be amortized = ($399,000-$394,000)/20 = $250Interest expense = $17,955+$250 = $18,205Date Journal Entry Debit Credit Interest Expense $18,205 Discount on bonds payable $250 Cash $17,955

On January 1, a company issued and sold a $399,000, 9%, 10-year bond payable, and received proceeds of $394,000. Interest is payable each June 30 and December 31. The company uses the straight-line method to amortize the discount. The journal entry to record the first interest payment is:

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