On January 1, Parson Freight Company issues 8.5%, 10-year bonds with a par value of $3,800,000. The bonds pay interest semiannually. The market rate of interest is 9.5% and the bond selling price was $3,541,787. The bond issuance should be recorded as: Multiple Choice Debit Cash $3,541,787; credit Bonds Payable $3,541,787. Debit Cash $3,541,787; debit Interest Expense $258,213; credit Bonds Payable $3,800,000. Debit Cash $3,541,787; debit Discount on Bonds Payable $258,213; credit Bonds Payable $3,800,000.

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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On January 1, Parson Freight Company issues 8.5%, 10-year bonds with a par value of $3,800,000. The bonds pay interest semiannually. The market rate
of interest is 9.5% and the bond selling price was $3,541,787. The bond issuance should be recorded as:
Multiple Choice
Debit Cash $3,541,787; credit Bonds Payable $3,541,787.
Debit Cash $3,541,787; debit Interest Expense $258,213; credit Bonds Payable $3,800,000.
Debit Cash $3,541,787; debit Discount on Bonds Payable $258,213; credit Bonds Payable $3,800,000.
Transcribed Image Text:On January 1, Parson Freight Company issues 8.5%, 10-year bonds with a par value of $3,800,000. The bonds pay interest semiannually. The market rate of interest is 9.5% and the bond selling price was $3,541,787. The bond issuance should be recorded as: Multiple Choice Debit Cash $3,541,787; credit Bonds Payable $3,541,787. Debit Cash $3,541,787; debit Interest Expense $258,213; credit Bonds Payable $3,800,000. Debit Cash $3,541,787; debit Discount on Bonds Payable $258,213; credit Bonds Payable $3,800,000.
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