Molina Corporation issues 5000 10-year 8% $1000 bonds dated January 1 2021 at 103.Recording the issuance will show a(n)

Question

Quizplus · Accepted Answer

The issuance of the bonds will increase the Bonds Payable account for the face value of the bonds, which is $5,000,000 ($1000 x 5000). The fact that the bonds are issued at 103 means that the company receives a premium, which will increase the Total Liabilities account. However, since the question only asks for the recording of the issuance, the premium is not explicitly mentioned in the answer choices. Therefore, the best choice is C, which accurately reflects the increase to Bonds Payable.

Molina Corporation Issues 5000 10-Year 8% $1000 Bonds Dated January