Suppose a company issues a $200,000, 9% bond, due in 10 years, with interest payable semi-annually. If
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Question:
Suppose a company issues a $200,000, 9% bond, due in 10 years, with interest payable semi-annually. If the market rate for this bond is 10%, for what amount would the company credit Bonds Payable at the time of issuance?
Correct Answer:b.$187,538
I understand how to get the number, but why is it not debit cash 187,538, debit discount 12462, and Credit bonds payable 200,000?
Anyhelp would be appreciated.Thank you.
Related Book For
Financial Accounting
ISBN: 978-0078025549
3rd edition
Authors: J. David Spiceland, Wayne Thomas, Don Herrmann
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