Your company sells $40,000 of one-year,10% bonds for an issue price of $39,000.The journal entry to record this transaction will include a credit to Bonds Payable in the amount of:
A)$39,000.
B)$40,000.
C)$43,000.
D)$44,000.

Question

Quizplus · Accepted Answer

The journal entry to record the issuance includes a debit to Cash for $39,000,a debit to Discount on Bonds Payable for $1,000 (or $40,000 − $39,000),and a credit to Bonds Payable for $40,000 (the face value of the bonds).

Your Company Sells $40,000 of One-Year,10% Bonds for an Issue