Question
On January 1, Parson Freight Company issues 9.0%, 10-year bonds with a par value of $3,400,000. The bonds pay interest semiannually. The market rate of
On January 1, Parson Freight Company issues 9.0%, 10-year bonds with a par value of $3,400,000. The bonds pay interest semiannually. The market rate of interest is 10.0% and the bond selling price was $3,188,142. The bond issuance should be recorded as:
Multiple Choice
a) Debit Cash $3,188,142; debit Discount on Bonds Payable $211,858; credit Bonds Payable $3,400,000.
b) Debit Cash $3,188,142; credit Bonds Payable $3,188,142.
c) Debit Cash $3,400,000; credit Bonds Payable $3,400,000.
d) Debit Cash $3,188,142; debit Interest Expense $211,858; credit Bonds Payable $3,400,000.
e) Debit Cash $3,400,000; credit Bonds Payable $3,188,142; credit Discount on Bonds Payable $211,858.
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