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On January 1, 2016, The Hanover Corporation issued $70,500 of 8%, 5-year bonds at 97. Hanover uses the straight-line method of bond discount amortization. The
On January 1, 2016, The Hanover Corporation issued $70,500 of 8%, 5-year bonds at 97. Hanover uses the straight-line method of bond discount amortization. The interest payments are due on December 31 each year. The journal entry used to record the issuance of the bond and the receipt of cash would be:
| A. | Cash | 70,500 | |
| Bonds Payable | 70,500 | ||
| B. | Cash | 70,500 | |
| Discount on Bonds Payable | 423 | ||
| Bonds Payable | 70,077 | ||
| C. | Cash | 70,077 | |
| Discount on Bonds Payable | 423 | ||
| Bonds Payable | 70,500 | ||
| D. | Cash | 68,385 | |
| Discount on Bonds Payable | 2,115 | ||
| Bonds Payable | 70,500 |
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