Question

On January 1, the first day of the fiscal year, Designer Fabric Inc. issues a $3,000,000, 8%, 10-year bond that pays semiannual interest of $120,000 ($3,000,000 x 8% x 1/2 year), receiving cash of $3,000,000. Journalize the entry to record (a) the issuance of the bonds. If an amount box does not require an entry, leave it blank. (b) the first interest payment on June 30, and (c) the payment of the principal on the maturity date.

Name: issuing bonds at face amount on january 1 the first day of the fiscal year designer fabric inc issues a 3000000 8 10 year bond that pays semiannual interest of 120000 3000000 x 8 x 12 year r 01362
Uploaded: 2022-07-15T07:15:29-08:00
Duration: 1 min 26 s
Channel: Manasvee Singh
Description: issuing bonds at face amount on january 1 the first day of the fiscal year designer fabric inc issues a 3000000 8 10 year bond that pays semiannual interest of 120000 3000000 x 8 x 12 year r 01362

          On January 1, the first day of the fiscal year, Designer Fabric Inc. issues a $3,000,000, 8%, 10-year bond that pays semiannual interest of $120,000 ($3,000,000 x 8% x 1/2 year), receiving cash of $3,000,000. Journalize the entry to record (a) the issuance of the bonds. If an amount box does not require an entry, leave it blank. (b) the first interest payment on June 30, and (c) the payment of the principal on the maturity date.

Added by Ines G.

Principles of Economics

Gregory Mankiw 8th Edition

Instant Answer

Solved by Expert Manasvee Singh

07/15/2022

Step 1

- Debit "Cash" for the amount received: $3,000,000 - Credit "Bonds Payable" for the face value of the bonds: $3,000,000 Journal Entry: \[ \text{Date: January 1} \] \[ \begin{array}{ll} \text{Account Title} & \text{Debit} \\ \text{Cash} & \$3,000,000 Show more…

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On January 1, the first day of the fiscal year, Designer Fabric Inc. issues a $3,000,000, 8%, 10-year bond that pays semiannual interest of $120,000 ($3,000,000 x 8% x 1/2 year), receiving cash of $3,000,000. Journalize the entry to record (a) the issuance of the bonds. If an amount box does not require an entry, leave it blank. (b) the first interest payment on June 30, and (c) the payment of the principal on the maturity date.