Your company sells $50,000 of one-year,10% bonds for an issue price of $52,000.The journal entry to record this transaction will include a credit to Bonds Payable in the amount of:
A)$50,000.
B)$52,000.
C)$55,000.
D)$57,000.

Question

Quizplus · Accepted Answer

The journal entry to record the issuance includes a debit to Cash for $52,000,a credit to Bonds Payable for $50,000 (the face value of the bonds),and a credit to Premium on Bonds Payable for $2,000 (or $52,000 − $50,000).

Your Company Sells $50,000 of One-Year,10% Bonds for an Issue