Answer:
Cash 4,400,200 debit
Discount on BP 89,800 debit
Bonds Payable 4,490,000 credit
Explanation:
The company should represent reality which is what actually occur:
the company issued bonds with a face value of 4,490,000
Then, it receive cash for 98/100 of this ammount:
4,490,000 x 98/100 = 4,400,200
The difference between face value and the proceeds will be a discount when negative and premium when above:
4,400,200 - 4,490,000 = <em>-89,800</em>
as it is negative, this is a discount.
