If ABC Company receives $100,000 cash in exchange for issuing 100 bonds at their $1,000 face value,the transaction will be recorded with a:
A) debit to Cash of $100,000 and a credit to Bonds Payable of $100,000.
B) debit to Bonds Payable of $100,000 and a credit to Cash of $100,000.
C) debit to Cash of $100,000 and a credit to Bonds Payable of $99,000 and to Premium on Bonds Payable of $1,000.

Question

Quizplus · Accepted Answer

The transaction involves receiving cash, so Cash is debited, and issuing bonds, so Bonds Payable is credited for the same amount.

If ABC Company Receives $100,000 Cash in Exchange for Issuing