The Reagan Corporation issues 1,000, 10-year, 8%, $1,000 bonds dated January 1, 2014, at 92. The journal entry to record the issuance will show a
A) credit to Discount on Bonds Payable for $80,000.
B) debit to Cash of $1,000,000.
C) credit to Bonds Payable for $1,000,000.
D) credit to Cash for $920,000.

Question

Quizplus · Accepted Answer

The bonds are issued at 92, meaning 92% of the face value. The credit to Bonds Payable should be for the face value of the bonds, which is $1,000,000.

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