III Value 10 points Malay Corporation issued 2 million 10yea

III. Value 10 points Malay Corporation issued $2 million, 10-year, 6% bonds on January 1, 2017 Instructions Prepare the entry to record the sale of these bonds, assuming they were issued at (a) 98. (b) 03

Solution

a. Bonds issued at 98 Debit Credit Cash (2000000*98/100) 1960000 Discount on bonds payable(2000000*2/100) 40000 10 Yr. 6% Bonds Payable 2000000 (To record issue of the bond at a discount) b.Bonds issued at 103 Cash (2000000*103/100) 2060000 Premium on bonds payable(2000000*3/100) 60000 10 Yr. 6% Bonds Payable 2000000 (To record issue of the bond at a premium)