Question
On January 1, Parson Freight Company issues 7.0%, 10-year bonds with a par value of $3,500,000. 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 $3,500,000. The bonds pay interest semiannually. The market rate of interest is 8.0% and the bond selling price was $3,466,993. The bond issuance should be recorded as:
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Debit Cash $3,466,993; credit Bonds Payable $3,466,993.
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Debit Cash $3,500,000; credit Bonds Payable $3,500,000.
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Debit Cash $3,500,000; credit Bonds Payable $3,466,993; credit Discount on Bonds Payable $33,007.
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Debit Cash $3,466,993; debit Discount on Bonds Payable $33,007; credit Bonds Payable $3,500,000.
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Debit Cash $3,466,993; debit Interest Expense $33,007; credit Bonds Payable $3,500,000.
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Fundamental Accounting Principles
Authors: John Wild, Ken Shaw, Barbara Chiappetta
22nd edition
9781259566905, 978-0-07-76328, 77862279, 1259566900, 0-07-763289-3, 978-0077862275
