Maybelline Corporation issues $3,000,000,10-year,8% bonds dated January 1 at 101.The journal entry to record the issuance will include a:

Question

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The bonds are issued at 101, which means they are issued at 101% of the face value. The premium is the difference between the issue price ($3,030,000) and the face value ($3,000,000), which is $30,000. Therefore, there is a credit to Premium on Bonds Payable for $30,000.

Maybelline Corporation Issues $3,000,000,10-Year,8% Bonds Dated January 1 at 101