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Discounted bond issuance On January 1, 2021, Empresas Morosas issued bonds payable for a par...

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Accounting

Discounted bond issuance

On January 1, 2021, Empresas Morosas issued bonds payable for a par value of $3,400,000. The bonds mature in 20 years. The contract interest rate is 9% payable semi-annually on June 30 and December 31. As the market rate of similar bonds is at 10%, the bonds were sold at a discount at 98% of their maturity value (par value).

1. Make the January 1, 2021 daily entry to register the bond issue.

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