Brief Exercise 108 Skysong Inc issues 267000 10year 6 bonds

Brief Exercise 10-8 Skysong, Inc. issues $267,000, 10-year, 6% bonds at 96\' Prepare the journal entry to record the sale of these bonds on March 1, 2017. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit

Solution

Answer

The correct journal entry [along with working] is provided below.

Note: Bonds issued at 96 means they are issued at a Discount.

Accounts title	Debit	Credit	Working
Cash	$                           256,320.00		[$267,000 x 96/100]
Discounts on Bonds Payable	$                             10,680.00		[$267,000 x 4/100]
Bonds Payable		$        267,000.00	Face Value
(Bonds Payable issued at 96)