Prepare the journal entries for the issuance of the bonds. Assume the bonds are
ID: 2339422 • Letter: P
Question
Prepare the journal entries for the issuance of the bonds. Assume the bonds are issued for cash on January 1, 2015 Enviro Company issues 8%, 10-year bonds with a par value of $250,000 and semiannual interest payments. On the issue date, the annual market rate for these bonds is 10%, which implies a selling price of 87 1/2. View transaction list Journal entry worksheet Record the issue of bonds with a par value of $250,000 Note: Enter debits before credits. Date General Journal Debit Credit Record entry Clear entry View general journalExplanation / Answer
Date
Accounts titles
Debit
Credit
I Jan 2015
Cash
$ 218,750*
Discount on Bonds Payable
$ 31,250**
Bonds payable
$ 250,000
(Issue of bonds at $87.5 per bond)
*$250000/100x87.5
**250000-31250
Date
Accounts titles
Debit
Credit
I Jan 2015
Cash
$ 218,750*
Discount on Bonds Payable
$ 31,250**
Bonds payable
$ 250,000
(Issue of bonds at $87.5 per bond)