Question

On december 31 wintergreen, incorporated, issued $150,000 of 7 percent, 10-year bonds at a price of 93. 25.

Answer 1

Cash - $139,875 (debit)

Discount on bonds payable - $10,125 (debit)

Bonds payable - $150,000 (credit)

What's known as cash?

Currency or coins are considered legal tender and can be used to pay for goods, settle debts, or exchange services. In some cases, the value of assets that can be quickly converted into cash is also included, as provided by a corporation.

What is the Bonds Payable Discount?

The difference between a bond's face value and its issuer's discounted selling price is known as the discount on bonds payable. This occurs when investors must obtain a greater effective interest rate than the bond's advertised interest rate.

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