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pogonyaev
3 years ago
15

On January 1, Parson Freight Company issues 8.0%, 10-year bonds with a par value of $3,200,000. The bonds pay interest semiannua

lly. The market rate of interest is 9.0% and the bond selling price was $2,982,557. The bond issuance should be recorded as:
Business
1 answer:
madreJ [45]3 years ago
6 0

Answer:

Dr Cash 2,982,557

Dr Discount on bonds payable 217,443

Cr Bonds payable 3,200,000

Explanation:

Preparation for the bond issuance Journal entry

Since we were told that the Company has par value of the amount of $3,200,000 and the bond selling price of $2,982,557 which means the bond issuance should be recorded as:

Dr Cash 2,982,557

Dr Discount on bonds payable 217,443

(3,200,000-2,982,557)

Cr Bonds payable 3,200,000

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