The journal entry to record $300,000 of bonds that were issued at 104 would be to:
A) debit Cash, $300,000; credit Bonds payable, $300,000.
B) debit Cash, $312,000; credit Bonds payable, $312,000.
C) debit Cash, $312,000; credit Bonds payable, $300,000; credit Premium on bonds payable, $12,000.
D) debit Cash, $300,000; debit Discount on bonds payable, $12,000; credit Bonds payable, $312,000.
C) debit Cash, $312,000; credit Bonds payable, $300,000; credit Premium on bonds payable, $12,000.
Explanation: debit cash for total amount (bond price × issue rate); credit Premium for difference between bond value and sale price.
Ex: $300,000 × (104/100) = $312,000 cash; $312,000 - $300,000 = $12,000 premium.
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