Blanding Company issues $1,181,000 of 8%,10-year debentures at 96 on 28 February 2017.The debentures pay interest on 28 February and 31 August.The journal entry to record the issue would include a:
A)credit to Discount on debentures payable for $47,240
B)debit to Cash for $1,181,000
C)debit to Cash for $1,133,760
D)credit to Debentures payable for $1,133,760

Question

Quizplus · Accepted Answer

The debentures are issued at 96, meaning they are issued at 96% of the face value. Therefore, the cash received is 96% of $1,181,000, which is $1,133,760.

Blanding Company Issues $1,181,000 of 8%,10-Year Debentures at 96 on 28