Question
Issuance of $800,000, 5-year, 8% payable annually (market rate 12%) for cash of $684,627 on 1/1/07 1) Were these bonds issued at a discount or
Issuance of $800,000, 5-year, 8% payable annually (market rate 12%) for cash of $684,627 on 1/1/07
1) Were these bonds issued at a discount or at a premium? Why?
A discount since the contract rate is less than the market rate.
Prepare the journal entry to record the issuance (sale) of the bonds:
| Cash (+A) | 684,627 | |
| Discount on Bonds Payable (+xL, |
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Japanese Management Accounting A World Class Approach To Profit Management
Authors: Michiharu Sakurai, Yasuhiro Monden
1st Edition
091529950X, 978-0915299508
