The sale and issuance of $400,000,8% bonds with a market rate of 8% would involving debiting Cash for:

Question

Quizplus · Accepted Answer

The cash received from the sale of the bonds would be equal to the face value of the bonds, which is $400,000. The market rate being the same as the coupon rate means that the bonds were issued at par, so there would be no premium or discount to adjust for. Therefore, the debit to Cash would be for the face value of the bonds, which is $400,000.

The Sale and Issuance of $400,000,8% Bonds with a Market