On the first day of the fiscal year, a company issues a $764,000, 115, 10-year bond...

Question

Question

business accounting

Answer 1

Answer #1

Account and Explanation	Debit	Credit
Premium on bonds payable [($802,200 - $764,000 / 10 years) x (6 months / 12 months)]	$1,910
Interest expense [Interest paid - Amortized premium = $42,020 - $1,910]	$40,110
Cash		$42,020
*(To record payment of interest and amortization of bond premium)*

Answer 2

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