The Freeman Corporation issues 2,000, 10-year, 8%, $1,000 bonds dated January 1 at 96. The journal entry to record the issuance will show a
A) debit to Cash of $2,000,000
B) credit to Discount on Bonds Payable for $80,000
C) credit to Bonds Payable for $1,920,000
D) debit to Cash for $1,920,000

Question

Quizplus · Accepted Answer

Cash received on the issue of bonds by Freeman Corporation = Face value of each bond × Number of bonds × Bond Quote = $1,000 × 2,000 × 0.96 = $1,920,000
The journal entry to record the issuance will show a debit to Cash for $1,920,000.

The Freeman Corporation Issues 2,000, 10-Year, 8%, $1,000 Bonds Dated