Use the information above to answer the following question.What journal entry would be made to record this bond issuance?
A) Debit Cash for $783,600, debit Discount on Bonds Payable for $16,400, and credit Bonds Payable for $800,000
B) Debit Cash for $800,000, credit Discount on Bonds Payable for $16,400, and credit Bonds Payable for $783,600
C) Debit Cash for $800,000 and credit Bonds Payable for $800,000
D) Debit Cash for $800,000, credit Bonds Payable for $783,600, and credit Interest Payable for $16,400

Question

Quizplus · Accepted Answer

The bond is issued at a discount, so the cash received is less than the face value of the bond. The discount on bonds payable is recorded as a debit, and the bonds payable is credited for the face value.

Use the Information Above to Answer the Following Question