Multiple Choice Question 147
Swifty Corporation issues 2600, 10-year, 6%, $1000 bonds datedJanuary 1, 2018, at 99. The journal entry to record the issuancewill show a:
A. debit to Cash of $2600000.
B. debit to Cash for $2574000.
C. credit to Discount on Bonds Payable for $26000
D. credit to Bonds Payable for $2626000
A
No. of bonds
2600
B
Amount per bond
$ 1,000.00
C=A x B
Face Value of Bonds Payable
$ 2,600,000.00
D
Issue Value of Bonds Payable [$2,600,000 x 99% = Cash received ]
$ 2,574,000.00
E= C - D
Discount on Bonds Payable
$ 26,000.00
Date
Accounts title
Debit
Credit
01-Jan-18
Cash
Bonds Payable
(Bonds payable issued at discount)
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