The journal entry to record the issue of bonds at a discount will include a
A)debit to Cash for the face amount of the bonds.
B)debit to Cash for the face amount of the bonds plus the amount of the discount.
C)debit to Cash for the face amount of the bonds minus the amount of the discount.
D)credit to Cash for the face amount of the bonds.
Use the information below to answer questions 90-91.
Coldwater Inc.issues $575,000 of 4%, 8-year bonds for cash proceeds of $502,774.The market interest rate is 6%.Interest is paid semi-annually.

Question

Quizplus · Accepted Answer

When bonds are issued at a discount, the cash received is less than the face amount of the bonds. Therefore, Cash is debited for the face amount minus the discount, which reflects the actual proceeds received from the bond issuance.

The Journal Entry to Record the Issue of Bonds at a Discount