Question

Wildhorse Company issued $1,830,000 of bonds on January 1, 2022.

Prepare the journal entry to record the issuance of the bonds if they are issued at (1) 100, (2) 97, and (3) 105.
(Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Answer 1

Step-by-step explanation:

Here are the journal entries to record the issuance of the bonds:

1. If the bonds are issued at 100:

Cash 1,830,000 Bonds Payable 1,830,000

2. If the bonds are issued at 97:

Cash 1,776,900 Discount on Bonds Payable 53,100 Bonds Payable 1,830,000

3. If the bonds are issued at 105:

Cash 1,921,500 Premium on Bonds Payable 91,500 Bonds Payable 1,830,000

These journal entries represent the accounting entries required to record the issuance of the bonds at different prices. The correct journal entry will depend on the price at which the bonds are issued.