Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting Business Reporting For Decision Making

Authors: Jacqueline Birt, Keryn Chalmers, Suzanne Maloney, Albie Brooks, Judy Oliver, David Bond

7th Edition

0730369323, 9780730369325

More Books

Students also viewed these Accounting questions