Question

Bond Corporation issues 5,000, 10-year, 8%, $1,000 bonds dated January 1, 2017, at 103. The journal entry to record the issuance will show a

Answer 1

Answer and Explanation:

The journal entry to record the issuance of the bond is as follows:

Cash Dr (5,000 × 103) $515,000

Discount on bond payable Dr $4,485,000

        To Bond payable (5,000 × $1,000)  $5,000,000

(Being the issuance of the bond is recorded)

Here cash and discount on bond payable is debited and credited the bond payable