Peak Enterprises issued bonds with a face value of $500,000, and received cash of $508,000. In recording this transaction, the liability account, Bonds Payable, will be increased by $500,000.

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The liability account, Bonds Payable, will be increased by the face value of the bonds, which is $500,000. The cash received is higher than the face value due to the premium received on the bonds. The premium will be recorded separately as a separate account, such as Premium on Bonds Payable.

Peak Enterprises Issued Bonds with a Face Value of $500,000