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General Accounting Discussions: Bond2

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    Hi friends pls show me what is the reason interest expense come out?

    Cash 594,000 Bond payable 600,000
    Discount 6,000 Interest expense 15,000

    The bonds were issued at 99($600,000X99%=$594,000), so the discount is $6,000. The accrued interest covers 3 months from
    4/1 to 7/1($600,000X10%X3/12)=$15,000).The cash received includes the $594,000 for the bonds and the $15,000 for the
    accrued interest, for a total of $609,000.

    Thank in advance.

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