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.

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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