On the first day of the fiscal year, a company issues a $2,000,000, 8%, five-year bond that pays semiannual

On the first day of the fiscal year, a company issues a $2,000,000, 8%, five-year bond that pays semiannual interest of $80,000 ($2,000,000 × 8% × ½), receiving cash of $1,920,873. Journalize the bond issuance.


Answer:

Cash 1,920,873
Discount on Bonds Payable 79,127
Bonds Payable 2,000,000