Bond Corporation issues 5000 10-year 8% $1000 bonds dated January 1 2017 at 103. The journal entry to record the issuance will show a

Question

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The bonds are issued at 103, meaning they are issued at 103% of the face value. The premium is calculated as 3% of the total face value of the bonds ($5,000,000), which equals $150,000. Therefore, the journal entry will include a credit to Premium on Bonds Payable for $150,000.

Bond Corporation Issues 5000 10-Year 8% $1000 Bonds Dated January