Question

Cornerstone Exercise 9-23 (Algorithmic) Issuance of Long-Term Debt Anne Corp. issued $375,000, 5% bonds. Required: Provide the necessary journal entry to record the issuance of these bonds assuming: a. The bonds were issued at par. Cash 375,000 Bonds Payable 375,000 Record issuance of bond at par Check My Work Forrect b. The bonds were issued at 102. Cash Bonds Payable Premium on Bonds Payable Record issuance of bond at premium Check My Work 3 more Check My Work uses remaining. Previous Next > All work saved. Email Instructor Email Instructor Sa Save and Exit l e Sale Submit Assignment for Grading

Answer 1

Solution

Transaction	General Journal	Debit	Credit
a	Cash	$ 375,000.00
	Bonds payable		$ 375,000.00
	(To record issue of bonds)
b	Cash	$ 382,500.00
	Premium on bonds payable		$      7,500.00
	Bonds payable		$ 375,000.00
	(To record issue of bonds at premium)
c	Cash	$ 345,000.00
	Discount on bonds payable	$    30,000.00
	Bonds payable		$ 375,000.00
	(To record issue of bonds at discount)

Working

	Bond price		Less: Par value	Bond Premium (discount)
b	(375000/100 x 102)	$ 382,500.00	$ 375,000.00	$      7,500.00
c	(375000/100 x 92)	$ 345,000.00	$ 375,000.00	$ (30,000.00)