On the first day of the fiscal year, a company issues a $500,000, 8%, 10-year bond that pays semiannual interest of $20,000 ($500,000 × 8% × 1/2), receiving cash of $530,000. Journalize the entry to record the issuance of the bonds.

Semiannual Interest

Interest that is calculated and paid twice a year, often used in the context of bonds or loans.

Fiscal Year

A 12-month period used for calculating annual financial statements in businesses and other organizations, which may or may not align with the calendar year.