TVX issued $800,000 of 5 percent, 10-year bonds payable at a price of 9.595 on March 31, 2012. The market interest rate at the date of issuance was 6 percent, and the date bonds pay interest semi-annually.
Requirements:
How much cash did the company receive on the issuance of the bonds payable?
Develop an effective-interest amortization table for the bond discount via the first two interest payments. Use exhibit 11A-1 as a guide, and round amounts to the closest dollar. Journalize the issuance of the bonds on March 30, 2012, and on September 30, 2012, payment of the first semi-annual interest amount and amortization of the bond discount. Descriptions are not required.