Answer:
The answer is D
Step-by-step explanation:
Any transaction that increases asset and expenses go into debit side while any transaction that decreases asset and expenses go into credit side.
Also, any transaction that increases income, liability equity into credit side and vice-versa.
The long-term bond was sold for $108,000. Cash(an asset) was received. Hence, we debit cash account (DR Cash $108,000).
Bonds payable is a liability. The liability will be increased by $100,000, meaning, we credit the account with this amount. Same goes for Premium on Bonds Payable.
Dr Cash $108,000
Cr Premium on Bonds Payable $8,000
Cr Bonds payable $100,000