Ivanhoe Company issues $320,000, 20 year, 7% bonds at 101

Question

Question

Ivanhoe Company issues $320,000, 20 year, 7% bonds at 101. Prepare the journal entry to record the sale of these bonds on June 1, 2022.

Answer 1

Answer #1

Date	Accounts titles and Explanation	Debit ($)	Credit ($)
June 1	Cash	323,200
	Bonds payable		320,000
	Premium on bonds payable		3,200
	(To record the sale of the bonds)

Cash - 320,000 * 101% = 323,200

Premium on bonds payable = 323,200 - 320,000 = 3,200

Answer 2

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