Prepare the journal entry for the issuance of these bonds. Assume the bonds are issued for cash on January 1, 2016. Garcia Company issues 9.00%, 15-year bonds with a par value of $310,000 and semiannual interest payments. On the issue date, the annual market rate for these bonds is 7.00%, which implies a selling price of 118 2/5.

• Record the issue of bonds with a par value of $310,000.

Note: Enter debits before credits.

Date	General Journal	Debit	Credit
Jan 01, 2016	Cash
	Bonds payable
	Premium on bonds payable

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