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