Question

Ivanhoe Company issues $265,000. 20-year, 10% bonds at 103. Prepare the journal entry to record the sale of these bonds on June 1, 2022. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit

Answer 1

Credit / $ Debit 272,950 ($ 265,000 + $ 7,950) Account Titles and Explanation Cash Bonds Payable Premium on bonds (To record issue of bonds at premium) $ $ 265,000 7,950 Bonds par value Par value per bond Number of bonds issued Premium per bond Total premium on bond $ $ $ $ $ 265,000 100 2,650 ($ 265,000 / $ 100) 3 ($ 103 - $ 100) 7,950 (2,650 bonds * $ 3)