Ferndale Corporation issued a $20,000, 10-year, 10% bond dated January 1, at 102. The journal entry to record the issuance of the bond will include a:

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The bond was issued at 102, which means it was sold for more than par value. The journal entry to record the issuance of a bond sold at a premium includes a debit to cash for the amount received (in this case $20,000 x 102% = $20,400) and a credit to bonds payable for the face value of the bond ($20,000). There is no need to record a discount on bonds payable since the bond was sold at a premium.

Ferndale Corporation Issued a $20,000, 10-Year, 10% Bond Dated January