Question

Sunland Inc. issues $250,000, 10-year, 9% bonds at 97. Prepare the journal entry to record the sale of these bonds on March 1, 2020.

Answer 1

Dr Cash 242,500

Dr Discount on Bond 7500

Cr Bonds Payable 250,000

Step-by-step explanation:

Preparation of the journal entry to record the sale of these bonds on March 1, 2020.

Based on the information given we were told that the company issues the amount of $250,000 that include 10-year, 9% bonds at 97 which means that the journal entry to record the sale of these bonds on March 1, 2020 will be

March 1

Dr Cash 242,500

(250,000*.97)

Dr Discount on Bond 7,500

(250,000-542,500)

Cr Bonds Payable 250,000