On January 1, Parson Freight Company issues 7.0%, 10-year bonds with a par value of $3,500,000. The bonds pay interest semiannually. The market rate of interest is 8.0% and the bond selling price was $3,262,172. Thebond issuance should be recorded as:Multiple ChoiceDebit Cash $3,500,000; credit Bonds Payable $3,500,000.Debit Cash $3,262,172; credit Bonds Payable $3,262,172.Debit Cash $3,500,000; credit Bonds Payable $3,262,172; credit Discount on Bonds Payable $237,828.Debit Cash $3,262,172; debit Discount on Bonds Payable $237,828; credit Bonds Payable $3,500,000.Debit Cash $3,262,172; debit Interest Expense $237,828; credit Bonds Payable $3,500,000.

Bonds are a form of loan or debt that is being issued by the company, on which regular interest…

Answered: On January 1, Parson Freight Company…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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