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Question 14.4: Discount Amortization Using the bond from Example Exercise 1...

Discount Amortization

Using the bond from Example Exercise 14-3, journalize the first interest payment and the amortization of the related bond discount.

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Interest Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36,358

Discount on Bonds Payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                           6,358

Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                          30,000

Paid interest and amortized the bond discount ($63,580 ÷ 10).

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