Maitland Corporation issued ten-year, $200,000, 8% bonds on July 1, Year 1. The bonds pay interest semiannually. On December 31, Year 1, Maitland made its first interest payment. The company decreased the cash account by $8,000, decreased the premium on bonds payable account by $240, and increased the interest expense account by $7,760.
Required:
Assuming that Maitland amortizes bond premiums using the straight line method, how much cash did Maitland receive for the issuance of the bond on July 1, Year 1?

Question

Quizplus · Accepted Answer

The Answer of Maitland Corporation issued ten-year, $200,000, 8% bonds on July 1, Year 1. The bonds pay interest semiannually. On December 31, Year 1, Maitland made its first interest payment. The company decreased the cash account by $8,000, decreased the premium on bonds payable account by $240, and increased the interest expense account by $7,760.
Required:
Assuming that Maitland amortizes bond premiums using the straight line method, how much cash did Maitland receive for the issuance of the bond on July 1, Year 1?

Maitland Corporation Issued Ten-Year, $200,000, 8% Bonds on July 1