Question

Park Corporation is planning to issue bonds with a face value of $750,000 and a coupon rate of 7.5 percent. The bonds mature in 4 years and pay interest semiannually every June 30 and December 31. All of the bonds were sold on January 1 of this year. Park uses the effective-interest amortization method and also uses a discount account. Assume an annual market rate of interest of 8.5 percent. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided. Round your final answer to whole dollars.) Required:
1. Prepare the journal entry to record the issuance of the bonds. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Record the issuance of bonds. Note: Enter debits before credits. Date General 3 Debit Credit January 01 Record entry Clear entry View general journal

Answer 1

Answer:

Debit cash with $750,000; and credit Bond payable also with $750,000.

Explanation:

The journal entry will appear as follows:

Date          Details                                          Dr ($)               Cr ($)        

Jan. 1         Cash                                            750,000

                  Bond Payable                                                    750,000

                  To record the issuance of bond.