Question

Kingbird, Inc. issues $250,000, 10-year, 6% bonds at 96. Prepare the journal entry to record the sale of these bonds on March 1, 2017. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Answer 1

Answer:

Kingbird, Inc. Journal entry

March 1 2017

Dr Cash (250,000*96%) 240,000

Dr Discount on bonds payable

(250,000×4%) 10,000

Bonds payable 250,000

(to record issuance of bonds)

Explanation:

Since Kingbird, Inc. issues $250,000, 10 years 6% bonds at 96 this means we have to record the transaction as issuance of bonds by Debiting Cash with (250,000*96%)240,000 and as well Debiting Discount on bonds payable with(250,000×4%) 10,000 while Bonds payable will be Credited with 250,000.