Plum Corporation issues $400,000 of 7 percent,five-year bonds on January 1,20x5,and sells them on the same date for their face value.The bond indenture states that interest is to be paid on January 1 and July 1 of each year.The entry to record the issuance includes

Question

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The issuance of bonds at face value involves a credit to Bonds Payable to record the liability.

Plum Corporation Issues $400,000 of 7 Percent,five-Year Bonds on January