Assume that on 1 January 2019 a company issued $100 000 10-year bonds with a 10 per cent coupon rate paid semi-annually. The bond is issued to yield a 12 per cent return to investors selling for $88 529. What would be the debit journal entry to record the sale of the bond on 1 January 2019?

Question

Quizplus · Accepted Answer

The debit journal entry to record the sale of the bond on 1 January 2019 would be to debit Cash for $88,529 since that is the amount received from the sale. No entry is required for Bonds since they are being sold. Therefore, option A is the best choice. Option B is incorrect because the company did not receive the full face value of the bond. Option C is incorrect because the Bonds account is not being debited, as they are being sold. Option D is incorrect for the same reason as option C.

Assume That on 1 January 2019 a Company Issued $100