Mel Company purchased $60,000 of Gibson Company's 20-year, 8 percent bonds at 98 on November 1, 2012. The bonds pay interest each January 1 and July 1, and they mature on July 1, 2029. Given this information, the entry to record the purchase of Gibson Company bonds would include a

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The entry to record the purchase of Gibson Company bonds would include a credit to Cash of $60,400 because the bonds were purchased at 98, which means that Mel Company paid 98% of the face value of the bonds.

Mel Company Purchased $60,000 of Gibson Company's 20-Year, 8 Percent