Question

11 Required information The following information applies to the questions displayed below Legacy issues $610,000 of 6.5 %, four-year bonds dated January 1, 2017, that pay interest semiannually on June 30 and December 31. They are issued at $579.203 and their market rate is 8 % at the issue date. Part 1 of 2 10 Required: 1. Prepare the January 1, 2017, journal entry to record the bonds issuance. points View transaction list Journal entry worksheet > Record the issue of bonds with a par value of $610,000 cash on January 1, 2017 at an issue price of $579,203. Note: Enter debits befare credts Date General Journal Debiti Credit Jan 01, 2017 11 12 of 15 Prev Next MacBook Air SLO % A & 9 O 4 5 7 1 P т Y U W E K F G н A В M С V command option command el V Z LL X S

Answer 1

Bonds are issued at less than the par value, so the difference between the par value and the issue price is discount on bonds payable.

Required journal entry is:

Date	Description	Debit	Credit
January 1, 2017	Cash	579203
	Discount on bonds payable	30797
	Bonds payable		610000
	(for bonds issued at discount)