Barkley Brothers Inc. shows the following information on its balance sheet for December 31, 2017.
$$\begin{array} { | l | r | r | }
\hline \text { Bonds payable } & \$ 100,000 & \
\hline \text { Less Unamortized discount } & 5,350 & \$ 94,650 \
\hline
\end{array}$$
The bonds have a stated annual interest rate of 5 percent and will mature on December 31, 2019. The market value of the bonds as of December 31, 2017, is $98,167. Assume that Barkley retired the bonds by purchasing them on the open market. The journal entry to record this purchase would include:
A)a credit to Bonds Payable for $100,000.
B)a debit to Discount on Bonds Payable for $5,350.
C)a credit to Discount on Bonds Payable for $5,350.
D)a debit to Cash for $98,167.

Question

Barkley Brothers Inc. shows the following information on its balance sheet for December 31, 2017.
$$\begin{array} { | l | r | r | } 
\hline \text { Bonds payable } & \$ 100,000 & \
\hline \text { Less Unamortized discount } & 5,350 & \$ 94,650 \
\hline
\end{array}$$
The bonds have a stated annual interest rate of 5 percent and will mature on December 31, 2019. The market value of the bonds as of December 31, 2017, is $98,167. Assume that Barkley retired the bonds by purchasing them on the open market. The journal entry to record this purchase would include:
A)a credit to Bonds Payable for $100,000.
B)a debit to Discount on Bonds Payable for $5,350.
C)a credit to Discount on Bonds Payable for $5,350.
D)a debit to Cash for $98,167.

Quizplus · Accepted Answer

The Answer of Barkley Brothers Inc. shows the following information on its balance sheet for December 31, 2017.
$$\begin{array} { | l | r | r | } 
\hline \text { Bonds payable } & \$ 100,000 & \
\hline \text { Less Unamortized discount } & 5,350 & \$ 94,650 \
\hline
\end{array}$$
The bonds have a stated annual interest rate of 5 percent and will mature on December 31, 2019. The market value of the bonds as of December 31, 2017, is $98,167. Assume that Barkley retired the bonds by purchasing them on the open market. The journal entry to record this purchase would include:
A)a credit to Bonds Payable for $100,000.
B)a debit to Discount on Bonds Payable for $5,350.
C)a credit to Discount on Bonds Payable for $5,350.
D)a debit to Cash for $98,167.

Barkley Brothers Inc The Bonds Have a Stated Annual Interest Rate of 5