On January 1, a company issues bonds dated January 1 with a par value of $300,000. The bonds mature in 5 years. The contract rate is 9%, and interest is paid semiannually on June 30 and December 31. The market rate is 10% and the bonds are sold for $288,413. The journal entry to record the first interest payment using "straight-line" amortization is:

Journal Entry for First Interest Payment

Dr. Interest Expense     $14,658.7

Cr. Discount on Bond   $1,158.7

Cr. Cash                         $13,500

Explanation:

The bond is issued on discount when the bond issuance proceeds are less than the face value of the bond. The discount is expensed over the bond period until maturity. It is added to the interest expense value to expense it.

Discount on the bond = Face value - cash proceeds = $300,000 - $288,413 = $11,587

According to straight line amortization

Discount charged in the period = $11587 / 5 = $2,317.4 per year = $1,158.7 per six months

Cash payment of interest = $300,000 x 9% = $27,000 per year = $13,500 per six months

Total Interest Expense = $13,500 + $1,158.7 =

it is d i just took the test

the answer is "b.the increased supply will create a surplus. "

the essential thought behind price controls is straightforward - utilize the power of law to modify the equilibrium of a market. for instance, the legislature may choose that the steel business needs to survive, and in this way pass a law to set a value floor on steel. this implies all steel sold must offer at or over the floor value, which must be set over the equilibrium cost for it to have any impact. the switch could likewise happen - the administration can choose that steel is excessively costly and set a value roof underneath its equilibrium value, with the goal that all steel must be sold at or beneath that ceiling.