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On January 1, Parson Freight Company issues 7.0%, 10-year bonds with a par value of $3,000,000. The bonds pay interest semiannually. The market rate of

On January 1, Parson Freight Company issues 7.0%, 10-year bonds with a par value of $3,000,000. The bonds pay interest semiannually. The market rate of interest is 8.0% and the bond selling price was $2,796,145. The bond issuance should be recorded as:

Multiple Choice

  • Debit Cash $2,796,145; debit Discount on Bonds Payable $203,855; credit Bonds Payable $3,000,000.

  • Debit Cash $3,000,000; credit Bonds Payable $2,796,145; credit Discount on Bonds Payable $203,855.

  • Debit Cash $2,796,145; debit Interest Expense $203,855; credit Bonds Payable $3,000,000.

  • Debit Cash $3,000,000; credit Bonds Payable $3,000,000.

  • Debit Cash $2,796,145; credit Bonds Payable $2,796,145.

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