Smith Corporation issues $2,100,000, 10-year, 8% bonds payable at a price of 97. The journal entry to record the issuance will include a:

Name: Smith Corporation issues $2,100,000, 10-year, 8% bonds payable at a price of 97. The journal entry to record the issuance will include a:
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Question

Quizplus · Accepted Answer

The bonds are issued at 97, which means 97% of the face value. Therefore, the cash received is $2,037,000 (97% of $2,100,000). Hence, the journal entry will include a debit to Cash for $2,037,000.

Smith Corporation Issues $2,100,000, 10-Year, 8% Bonds Payable at a Price