If ABC Company receives $100,000 cash in exchange for issuing 100 bonds at their $1,000 face value,the transaction will be recorded with a:
A)debit to Cash of $100,000 and a credit to Bonds Payable of $100,000.
B)debit to Bonds Payable of $100,000 and a credit to Cash of $100,000.
C)debit to Cash of $100,000 and a credit to Bonds Payable of $99,000 and to Premium on Bonds Payable of $1,000.
D)debit to Bonds Payable of $100,000 and a credit to Cash of $99,000 and to Premium on Bonds Payable of $1,000.

Question

Quizplus · Accepted Answer

The journal entry to record the issuance includes a debit to Cash for $100,000 and a credit to Bonds Payable for $100,000 (or the total face value of the bonds of $1,000 × 100 bonds).

If ABC Company Receives $100,000 Cash in Exchange for Issuing