Ask Question
15 December, 12:22

On january 1 of 2015, parson freight company issues 9.0%, 10-year bonds with a par value of $3,400,000. the bonds pay interest semi-annually. the market rate of interest is 10.0% and the bond selling price was $3,168,967. the bond issuance should be recorded as:

+4
Answers (1)
  1. 15 December, 15:28
    0
    Here the price of the bond ($3,168,967) is lower than the Par value of the bond ($3,400,000). Therefore, this bond is issued at a discount.

    Bon discount amount = $3,400,000 - $3,168,967

    =231,033

    Journal entry for Bond issuance:

    Cash $3,168,967

    Discount on Issue of Bond $231,033

    Bonds payable $3,400,000
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “On january 1 of 2015, parson freight company issues 9.0%, 10-year bonds with a par value of $3,400,000. the bonds pay interest ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers