Question: Entries for Issuing Bonds and Amortizing Discount by Straight-Line Method On the first day of its fiscal year, Woodard Company issued $12,000,000 of 10-year, 8%

Entries for IssuingBondsand AmortizingDiscountby Straight-Line Method

On the first day of its fiscal year, Woodard Company issued $12,000,000 of 10-year, 8% bonds to finance its operations of producing and selling home improvement products. Interest is payable semiannually. The bonds were issued at a market (effective) interest rate of 10%, resulting in Woodard Company receiving cash of $10,504,541.

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b.Determine the amount of the bond interest expense for the first year.

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