On January 1,Hanley Corporation issued $2,000,000,10-year,8% bonds at 101.The journal entry to record this transaction would include a:

Question

Quizplus · Accepted Answer

The bonds were issued at 101, which means they were issued at 101% of the face value, resulting in a premium of $20,000 ($2,000,000 x 1% = $20,000). Therefore, the journal entry would include a credit to Premium on Bonds Payable for $20,000.

On January 1,Hanley Corporation Issued $2,000,000,10-Year,8% Bonds at 101