Martinez Corporation issues 2000 10-year 8% $1000 bonds dated January 1 2017 at 98. The journal entry to record the issuance will show a

Question

Quizplus · Accepted Answer

The correct journal entry to record the issuance of the bonds at 98 (or 98% of the face value) involves debiting Cash for the amount received, which is 98% of the total face value of the bonds. The total face value is 2000 bonds * $1000 each = $2,000,000. 98% of $2,000,000 is $1,960,000, which is the amount debited to Cash.

Martinez Corporation Issues 2000 10-Year 8% $1000 Bonds Dated January