The entry to record the issuance of the bonds on January 1, 2011, would include:
A) a credit to Discount on Bonds Payable of $57,500.
B) a debit to Cash of $442,500.
C) a debit to Bonds Payable of $500,000.
D) a credit to Premium on Bonds Payable of $90,000.

Question

Quizplus · Accepted Answer

The entry to record the issuance of the bonds on January 1, 2011 would include a debit to Cash for the amount received from the sale of the bonds, which is $442,500. There is no premium or discount mentioned in the question. The credit to Bonds Payable or long-term debt account would equal the face value of the bonds issued, which is $500,000.

The Entry to Record the Issuance of the Bonds on January