Premium Amortization On the first day of the fiscal year, a company issues a $8,000,000, 7%, 4-year bond that pays semiannual interest of $280,000 ($8,000,000 × 7% × ½), receiving cash of $8,879,058

Business Nov 12, 2020

Premium Amortization

On the first day of the fiscal year, a company issues a $8,000,000, 7%, 4-year bond that pays semiannual interest of $280,000 ($8,000,000 × 7% × ½), receiving cash of $8,879,058.

Journalize the first interest payment and the amortization of the related bond premium. Round to the nearest dollar. If an amount box does not require an entry, leave it blank.

Accounts Payable

Bonds Payable

Cash

Discount on Bonds Payable

Interest Expense

Interest Payable

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