Multiple Choice Question 157 Sunland Corporation issues 4200

Multiple Choice Question 157

Sunland Corporation issues 4200, 10-year, 10%, $1000 bonds dated January 1, 2018, at 104. The journal entry to record the issuance will show a

A.

B.

Solution

Answer :

D. Credit to Premium on Bonds Payable for $168,000

Explanation

Journal entry

Cash Debit 4,368,000

Bonds payable credit 4,200,000

Premium on Bonds payable credit 168,000