Question

Prepare the following Journal entries for Bond Issuance March 1      -- Issued $400,000 in bonds at face...

Prepare the following Journal entries for Bond Issuance

March 1      -- Issued $400,000 in bonds at face value.

June 3        -- Issued $100,000 in bonds for 98.

October 30 -- Issued $200,000 in bonds for 101.

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Answer #1

Journal entry :

Date account and explanation debit credit
Mar 1 Cash 400000
Bonds payable 400000
(To record bond issue)

Journal entry :

Date account and explanation debit credit
June 3 Cash (100000*98/100) 98000
Discount on bonds payable 2000
Bonds payable 100000
(To record bond issue)

Journal entry :

Date account and explanation debit credit
Oct 30 Cash 202000
Bonds payable 200000
Premium on bonds payable 2000
(To record bond issue)
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