On January 2, 2017, Mahoney Sales issues $10,000 in bonds for $9,400
The bonds are five-year bonds with a stated rate of 4% and pay semiannual interest on June 30 and December 31. Mahoney Sales uses the straight-line method to amortize bond discount. Prepare the journal entry for the first interest payment on June 30, 2017.
What will be an ideal response
Interest Expense 260
Discount on Bonds Payable 60
Cash 200 .Interest Expense = ($10,000 x 4% x 6/12 ) + ($600 / 10 ) = $260
Business
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