Prepare the journal entry for the issuance of these bonds. Assume the bonds are issued for cash on January 1, 2017. Garcia Company issues 10.50%, 15-year bonds with a par value of $250,000 and semiannual interest payments. On the issue date, the annual market rate for these bonds is 8.50%, which implies a selling price of 116 3/4.

Record the issue of bonds with a par value of $250,000.

Date General Journal Debit Credit Jan 01, 2017 Cash 291,948 41,948 Discount on bonds payable Bonds payable 250,000