Question

Your company issues $500,000 in bonds at a price of 98. The journal entry used to record the issuance will include a debit to:

A) Cash for $490,000, a debit to Discount on Bonds Payable for $10,000, and a credit to Bonds Payable for $500,000.

B) Cash for $490,000, a debit to Discount on Bonds Payable for $10,000, and a credit to Bonds Payable for $500,000.

C) Bonds Payable for $500,000, a credit to Discount on Bonds Payable for $10,000, and a credit to Cash for $490,000.

D) Bonds Payable for $490,000, a debit to Discount on Bonds Payable for $10,000, and a credit to Cash for $500,000.

Answer

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