QS $10-8($Algo$)$ Journalizing premium bond issuance LO P$3$

Garcia Company issues $8\mathrm{.}5\%,15-$year bonds with a par value of $$390,000$ and semiannual interest payments. On the issue date, the annual market rate for these bonds is $6\mathrm{.}5\%,$ which implies a selling price of $\frac{1161}{4}.$

Prepare the journal entry for the issuance of these bonds for cash on January $1.$

Journal entry worksheet

$1$

Record the issue of bonds with a par value of $$390,000$ at a selling price of $116\frac{1}{4}.$

Note: Enter debits before credits.

$\backslash$table$[[$Date$,$General Journal,Debit,Credit$],[$January $01,$Cash,,$],[,$Premium on bonds payable,,$],[,$Bonds payable,,$],[,,,],[,,,],[,,,],[,,,]]$