My question: Where does the $5000 discount come from? If a $100,000,...
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Accounting
My question: Where does the $5000 discount come from?
If a $100,000, 4-year bond at 12% compounded semiannually is sold on January 1, 19X1 at 95, the entries for the interest and discount amortization will be made on June 30 and December 31, as follows: June 30 Interest Expense 6,000 Cash 6,000 $100,000 12% 12 . Interest Expense 625 Bond Discount 625 $5,000 discount 4 12 . Dec. 31 Same entries as on June 30.
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