On January 1, Parson Freight Company issues 9.0 %, 10-year bonds with a par value of $3,900,000. The bonds pay interest semiannually. The market rate of interest is 10.0% and the bond selling price was $3,634,992. The bond issuance should be recorded as: Multiple Choice Debit Cash $3,900,000; credit Bonds Payable $3,900,000. Debit Cash $3,634,992; credit Bonds Payable $3,634,992. Debit Cash $3,900,000; credit Bonds Payable $3,634,992; credit Discount on Bonds Payable $265,008. Debit Cash $3,634,992; debit Discount on Bonds Payable $265,008; credit Bonds Payable $3,900,000. Debit Cash $3,634,992; debit Interest Expense $265,008; credit Bonds Payable $3,900,000.
On January 1, Parson Freight Company issues 9.0 %, 10-year bonds with a par value of $3,900,000. The bonds pay interest semiannually. The market rate of interest is 10.0% and the bond selling price was $3,634,992. The bond issuance should be recorded as: Multiple Choice Debit Cash $3,900,000; credit Bonds Payable $3,900,000. Debit Cash $3,634,992; credit Bonds Payable $3,634,992. Debit Cash $3,900,000; credit Bonds Payable $3,634,992; credit Discount on Bonds Payable $265,008. Debit Cash $3,634,992; debit Discount on Bonds Payable $265,008; credit Bonds Payable $3,900,000. Debit Cash $3,634,992; debit Interest Expense $265,008; credit Bonds Payable $3,900,000.
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter9: Long-term Liabilities
Section: Chapter Questions
Problem 7MCQ
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![On January 1, Parson Freight Company issues 9.0%, 10-year bonds with a par value of $3,900,000. The bonds pay interest semiannually. The market rate
of interest is 10.0% and the bond selling price was $3,634,992. The bond issuance should be recorded as:
Multiple Choice
Debit Cash $3,900,000; credit Bonds Payable $3,900,000.
Debit Cash $3,634,992; credit Bonds Payable $3,634,992.
Debit Cash $3,900,000; credit Bonds Payable $3,634,992; credit Discount on Bonds Payable $265,008.
Debit Cash $3,634,992; debit Discount on Bonds Payable $265,008; credit Bonds Payable $3,900,000.
Debit Cash $3,634,992; debit Interest Expense $265,008; credit Bonds Payable $3,900,000.
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Transcribed Image Text:On January 1, Parson Freight Company issues 9.0%, 10-year bonds with a par value of $3,900,000. The bonds pay interest semiannually. The market rate
of interest is 10.0% and the bond selling price was $3,634,992. The bond issuance should be recorded as:
Multiple Choice
Debit Cash $3,900,000; credit Bonds Payable $3,900,000.
Debit Cash $3,634,992; credit Bonds Payable $3,634,992.
Debit Cash $3,900,000; credit Bonds Payable $3,634,992; credit Discount on Bonds Payable $265,008.
Debit Cash $3,634,992; debit Discount on Bonds Payable $265,008; credit Bonds Payable $3,900,000.
Debit Cash $3,634,992; debit Interest Expense $265,008; credit Bonds Payable $3,900,000.
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