Question

On January 1, Parson Freight Company issues 9.0%, 10-year bonds with a par value of $2,900,000. The bonds pay interest semiannually. The market rate of interest is 10.0% and the bond selling price was $2.719,298. The bond issuance should be recorded as: Multiple Choice O Debit Cash $2,719,298, debit interest Expense $180,702, credit Bonds Payable $2,900,000 O O Debit Cash $2,900,000; credit Bonds Payable $2.719.298, credit Discount on Bonds Payable $180,702 O o Debit Cash $2,900,000 credit Bonds Payable $2,900,000. O Debit Cash $2,719,298, debit Discount on Bonds Payable $180,702, credit Bonds Payable $2,900,000. O c) Debit Cash $2,719,298 credit Bonds Payable $2.719,298.

Answer 1

Correct option is: d. Debit Cash $2719298 , Debit Discount on bonds payable $180702 Credit bonds payable $2900000
Workings:
Accounts Titles and Explanation	Debit	Credit
Cash	$ 27,19,298
Discount on bonds Payable	$   1,80,702
Bonds payable		$ 29,00,000
(Being bonds issue)