Respuesta :
Answer:
Bond issuance:
Dr cash $710,000
Dr discount on bonds payable $40,000
Cr bonds payable $750,000
The payment of interest on December 31, 2018:
Dr interest expense $50,000
Cr discount on bonds payable $5000
Cr cash $45,000
Explanation:
The bonds were issued at a discount to their face value, as a result, the discount on bonds payable is computed thus:
discount on bonds payable=$750,000-$710,000=$40,000
Bonds payable would be credited with $750,000 while cash and discount on bonds payable would be debited with $710,000 and $40,000 respectively
annual discount amortization=$40,000/8=$5000
annual coupon=$750,000*6%=$45000
