On January 1, a company issues bonds dated January 1 with a par value of $300,000. The bonds mature in 5 years. The contract rate is 9%, and interest is paid semiannually on June 30 and December 31. The market rate is 8% and the bonds are sold for $312,177. The journal entry to record the issuance of the bond is:
A. Debit Cash $300,000; debit Premium on Bonds Payable $12,177; credit Bonds Payable $312,177.
B. Debit Cash $312,177; credit Premium on Bonds Payable $12,177; credit Bonds Payable $300,000.
C. Debit Cash $312,177; credit Discount on Bonds Payable $12,177; credit Bonds Payable $300,000.
D. Debit Bonds Payable $300,000; debit Bond Interest Expense $12,177; credit Cash $312,177.
E. Debit Cash $312,177; credit Bonds Payable $312,177.
Answer: B
You might also like to view...
Which of the following accounts is not closed during the closing procedure?
a. Income Summary b. Commissions Earned c. Retained Earnings d. Dividends
How are professionals defined? Describe the American Bar Association's Model Rules of Professional Responsibility
What will be an ideal response?
The diagnostic role of marketing research includes gathering and presenting factual statements.
Answer the following statement true (T) or false (F)
The act of state doctrine permits other countries to intervene in a nation's government when human rights are violated
Indicate whether the statement is true or false