On the first day of the fiscal year, a company issues a $3,000,000, 11%, five-year bond that pays semiannual

On the first day of the fiscal year, a company issues a $3,000,000, 11%, five-year bond that pays semiannual interest of $165,000 ($3,000,000 × 11% × ½), receiving cash of $2,889,599. Journalize the bond issuance.


Answer:

Cash 2,889,599
Discount on Bonds Payable 110,401
Bonds Payable 3,000,000