Question

The Hayden Corporation issues 1,000, 10-year, 8%, $2,000 bonds dated January 1 at 92. The journal entry to record the issuance will show a credit to Cash for $1,840,000 debit to Cash of $2,000,000 credit to Discount on Bonds Payable for $160,000 credit to Bonds Payable for $2,000,000

Answer 1

Answer:

credit to Bonds Payable for $2,000,000

Explanation:

The journal entry is shown below:

Cash A/c Dr $1,840,000             (1,000 shares × $2,000 × 92%)

Discount on on bonds payable A/c $160,000          (1,000 shares × $2,000 × 8%)

     To Bonds payable A/c $2,000,000    (1,000 shares × $2,000)

(Being bond is issued at a discount is recorded)

When the bond is issued, the cash account and the discount on the bonds payable were debited and the bonds payable were credited.