Plaza Corporation issued $350,000 of 8%,10-year bonds for 98.The entry to record the issuance of the bonds includes a:

Question

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The bonds were issued for 98% of their face value, or for $343,000 ($350,000 x 0.98). This means that there is a discount of $7,000 ($350,000 - $343,000) on the bonds. Therefore, the entry to record the issuance of the bonds would include a debit to Discount on Bonds Payable for $7,000 and a credit to Bonds Payable for $350,000. The entry would also include a credit to Cash for $343,000, but this is not one of the options listed.

Plaza Corporation Issued $350,000 of 8%,10-Year Bonds for 98