Marlo Corporation issued $400,000 of 14%, 10-year bonds for $380,000. The entry to record the issuance of the bonds includes a:

Name: Marlo Corporation issued $400,000 of 14%, 10-year bonds for $380,000. The entry to record the issuance of the bonds includes a:
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Question

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The bonds were issued at a discount ($380,000 instead of the face value of $400,000), so the company records this difference as a debit to Discount on Bonds Payable, indicating that the bonds were sold for less than their face value.

Marlo Corporation Issued $400,000 of 14%, 10-Year Bonds for $380,000