Question

Ayayai Corp. issued 3,200 5%, 5-year, $1,000 bonds dated January 1, 2022, at face value. Interest is paid each January 1.

(a) Prepare the journal entry to record the sale of these bonds on January 1, 2022.

Answer 1

Step-by-step explanation:

The journal entry is shown below:

On January 1, 2022

Cash A/c Dr $3,200,000 (3,200 shares × $1,000)

To Bonds payable A/c $3,200,000

(Being the sale of the bond is recorded)

While recording the sale of the bond we debited the cash account as cash is received and credited the bond payable account as bond is sold.

The interest rate is ignored