Prepare the journal entry for the issuance of these bonds. Assume the bonds are

Question

Prepare the journal entry for the issuance of these bonds. Assume the bonds are issued for cash on January 1, 2016. Garcia Company issues 12.00%, 15-year bonds with a par value of $370,000 and semiannual interest payments. On the issue date, the annual market rate for these bonds is 10.00%, which implies a selling price of 115 38. View transaction list Journal entry worksheet Record the issue of bonds with a par value of $370,000. Note: Enter debits before credits. Date General Journal Debit Credit Jan 01, 2016 . Record entry Clear entry View general journal

Explanation / Answer

Date General Journal Debit Credit Jan 01, 2016 Cash($370,000 × 1.15375) $426,887.5 Bonds payable $370,000 Premium on bonds payable $56,887.5

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