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# On the first day of its fiscal year, Jones Company issued \$6,000,000

### Resolved Question:

On the first day of its fiscal year, Jones Company issued \$6,000,000 of five-year, 8% bonds to finance its operations of producing and selling home electronics equipment. Interest is payable semiannually. The bonds were issued at an effective interest rate of 11%. Refer to the tables in Appendix A for present value factors.

a.     Record the entries for the following:
1.     Sale of the bonds.
2.     First semiannual interest payment. (Amortization of discount is to be recorded annually.)
3.     Second semiannual interest payment.
4.     Amortization of discount at the end of the first year, using the straight-line method. Round to the nearest dollar.

b.     Determine the amount of the bond interest expense for the first year.

Appendix a:
Present value of \$1 at Compound interest Due in N periods
N 10
5.5% = 0.58543

Present value of ordinary annuity of \$1 per period
N 10
5.5% = 7.53763
Submitted: 6 years ago.
Category: Homework
Expert:  Neo replied 6 years ago.
Good day!

Thank you for requesting me.

Effective interest method will be used for required a.1, 1a.2 and b. Do I get that right?
Customer: replied 6 years ago.
Yes, i think so? I am not really sure what that means!
Expert:  Neo replied 6 years ago.

You need to spend \$3 to view this post. Add Funds to your account and buy credits.
Neo, Tutor
Category: Homework
Satisfied Customers: 12101
Experience: BS Accounting

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