Question

On October 1, 2017 Bartley Corporation issued 5%, 10-year bonds with a face value of $8,000,000 at 103. Interest is paid on October 1 and April 1, with any premiums or discounts amortized on a straight-line basis. 18.The entry to record the issuance of the bonds would include a

Answer 1

Answer and Explanation:

The journal entry to record the issuance of the bonds is shown below:

Cash Dr  ($8,000,000 × 1.03) $8,240,000

        To Bond payable $8,000,000

        To Premium on bond payable $240,000

(Being issuance of the bond is recorded)

Here cash is debited as it increased the asset and credited the bond payable and the premium on bond payable as it increased the liabilities

Hence, the same is to be considered