Question
6. On January 1, a company issues bonds dated January 1 with a par value of $300,000. The bonds mature in 5 years. The contract
6. On January 1, a company issues bonds dated January 1 with a par value of $300,000. The bonds mature in 5 years. The contract rate is 9%, and interest is paid semiannually on June 30 and December 31. The market rate is 10% and the bonds are sold for $288,413. The journal entry to record the issuance of the bond is which of the following? Debit Cash $300,000; credit Discount on Bonds Payable $11,587; credit Bonds Payable $288,413. Debit Cash $288,413; debit Discount on Bonds Payable $11,587; credit Bonds Payable $300,000. Debit Cash $288,413; credit Bonds Payable $288,413. Debit Cash $288,413; debit Premium on Bonds Payable $11,587; credit Bonds Payable $300,000. Debit Bonds Payable $300,000; debit Bond Interest Expense $11,587; credit Cash $311,587.
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