1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Lorico [155]
3 years ago
10

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 × 7% × ½), receiving cash of $5,400,000. Journalize the first interest payment and the amortization of the related bond premium. If an amount box does not require an entry, leave it blank.
Business
1 answer:
barxatty [35]3 years ago
6 0

Answer:

Dr Interest expense 135,000

Dr Bond premium 40,000

Cr Cash 175,000

Explanation:

Journal entry

Using the straight-line method

Premium =Cash proceeds - face value

5,400,000-5,000,000

=$400,000

The number of periods is:

=5 years * 2 since semi-annual

=10 periods

The amortization amount is thus:

400,000/10

=$40,000

Dr Interest expense (175,000-40,000) 135,000

Dr Bond premium 40,000

Cr Cash 175,000

You might be interested in
Faisal and Torie each want to make an investment, but they have different needs. Based on the information, which investment opti
umka21 [38]

The types of investments used by Faisal and Torie are D. Money markets and savings accounts.

Both have the same savings goal, although nominally different.

<h2>Further explanation </h2>

Investment is a term that has several meanings related to finance and economics. This term also relates to the accumulation of assets/property in the form of future income expectations. Sometimes, investment is also commonly referred to as capital investment.

Investment Benefits:

  • Add Assets
  • Meeting Future Needs
  • Saving Lifestyle
  • Avoiding Account Debit Involved

Investment type :

  • Deposit
  • stock
  • Bond
  • Mutual fund
  • Property investment
  • Gold

Learn More

investment, savings, assets brainly.com/question/7162202

benefits and types of investments brainly.com/question/7162202

Details

Class: Middle School

Subject: business

keywords: investment, stocks, savings

5 0
3 years ago
How do you manage a business?:​
goldenfox [79]
Business management definition is managing the coordination and organization of business activities Management is in charge of planning, organizing, directing, and controlling the business's resources so they can meet the objectives of the policy.
4 0
3 years ago
Read 2 more answers
Therapeutic services pays less than most other careers
RideAnS [48]
The answer to this question would be ; true
5 0
3 years ago
Read 2 more answers
Which of the following is an insurance company?
frez [133]
What are the options?
7 0
3 years ago
Read 2 more answers
Issued a cheque of rs. 39000 to Saurya stores in full settlement. <br>journal entry​
Semmy [17]

Answer:

When issuing a check to a creditor as is being done here, you need to debit the creditors account (Accounts Payable) to show that you are paying off the debt.

You also need to credit cash because a credit will show that cash was used to pay for something and so has reduced.

Date               Account Title                                                  Debit            Credit

XX-XX-XXX   Accounts Payable - Saurya Stores             Rs. 39,000

                       Cash                                                                                Rs. 39,000

4 0
3 years ago
Other questions:
  • Tayler Company reported the following data.
    10·1 answer
  • Why is the block letter format commonly used for business letters​
    7·2 answers
  • When benchmarking a process, it is important to choose another industry similar to yours, so the results will be comparable. Tru
    9·1 answer
  • The Allowance for Bad Debts account had a balance of $6,300 at the beginning of the year and $8,100 at the end of the year. Duri
    11·1 answer
  • The maturity value of a 90-day note for $4,000 with an interest rate of 10 percent is?
    15·1 answer
  • Crane Company on January 1, 2018, granted stock options for 63000 shares of its $10 par value common stock to its key employees.
    15·1 answer
  • Determine financial statement amounts and prepare owner's equity statement.
    12·1 answer
  • Mohave Corp. is considering outsourcing production of the umbrella tote bag included with some of its products. The company has
    9·1 answer
  • If a member firm believes that a senior citizen with an account at the firm is being financially exploited, the member would con
    13·1 answer
  • The AutoSum icon is located in<br> which of the following groups on the<br> Home tab? *
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!