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on January 1, a company issues bonds dated January 1 with a par value of $400,00

ID: 2372364 • Letter: O

Question

on January 1, a company issues bonds dated January 1 with a par value of $400,000. The bonds mature in 5 years. The contract rate is 7%, and interest is paid semiannually on June 30 and December 31. The market rate is 8% and the bonds are sold for $383,793. The journal entry to record the issuance of the bond is: Question 9 options: Debit Cash $400,000; debit Discount on Bonds Payable $16,207; credit Bonds Payable $416,207. Debit Cash $383,793; debit Discount on Bonds Payable $16,207; credit Bonds Payable $400,000. Debit Bonds Payable $400,000; debit Interest Expense $16,207; credit Cash $416,207. Debit Cash $383,793; debit Premium on Bonds Payable $16,207; credit Bonds Payable $400,000. Debit Cash $383,793; credit Bonds Payable $383,793. on January 1, a company issues bonds dated January 1 with a par value of $400,000. The bonds mature in 5 years. The contract rate is 7%, and interest is paid semiannually on June 30 and December 31. The market rate is 8% and the bonds are sold for $383,793. The journal entry to record the issuance of the bond is: Question 9 options: Debit Cash $400,000; debit Discount on Bonds Payable $16,207; credit Bonds Payable $416,207. Debit Cash $383,793; debit Discount on Bonds Payable $16,207; credit Bonds Payable $400,000. Debit Bonds Payable $400,000; debit Interest Expense $16,207; credit Cash $416,207. Debit Cash $383,793; debit Premium on Bonds Payable $16,207; credit Bonds Payable $400,000. Debit Cash $383,793; credit Bonds Payable $383,793. on January 1, a company issues bonds dated January 1 with a par value of $400,000. The bonds mature in 5 years. The contract rate is 7%, and interest is paid semiannually on June 30 and December 31. The market rate is 8% and the bonds are sold for $383,793. The journal entry to record the issuance of the bond is: on January 1, a company issues bonds dated January 1 with a par value of $400,000. The bonds mature in 5 years. The contract rate is 7%, and interest is paid semiannually on June 30 and December 31. The market rate is 8% and the bonds are sold for $383,793. The journal entry to record the issuance of the bond is: Debit Cash $400,000; debit Discount on Bonds Payable $16,207; credit Bonds Payable $416,207. Debit Cash $383,793; debit Discount on Bonds Payable $16,207; credit Bonds Payable $400,000. Debit Bonds Payable $400,000; debit Interest Expense $16,207; credit Cash $416,207. Debit Cash $383,793; debit Premium on Bonds Payable $16,207; credit Bonds Payable $400,000. Debit Cash $383,793; credit Bonds Payable $383,793. Debit Cash $400,000; debit Discount on Bonds Payable $16,207; credit Bonds Payable $416,207. Debit Cash $383,793; debit Discount on Bonds Payable $16,207; credit Bonds Payable $400,000. Debit Bonds Payable $400,000; debit Interest Expense $16,207; credit Cash $416,207. Debit Cash $383,793; debit Premium on Bonds Payable $16,207; credit Bonds Payable $400,000. Debit Cash $383,793; credit Bonds Payable $383,793. Debit Cash $400,000; debit Discount on Bonds Payable $16,207; credit Bonds Payable $416,207. Debit Cash $383,793; debit Discount on Bonds Payable $16,207; credit Bonds Payable $400,000. Debit Bonds Payable $400,000; debit Interest Expense $16,207; credit Cash $416,207. Debit Cash $383,793; debit Premium on Bonds Payable $16,207; credit Bonds Payable $400,000. Debit Cash $383,793; credit Bonds Payable $383,793.

Explanation / Answer

The journal entry to record the issuance of the bond is:
Dr Cash $383,793
Dr Discount on bonds payable $16,207
Cr Bonds payable $400,000 (always face value)

Answer:
B. Debit Cash $383,793; debit Discount on Bonds Payable $16,207; credit Bonds Payable $400,000.