Final answer:
The correct journal entry to record the issuance of the bonds will include a debit to Cash for $3,552,000 and a credit to Bonds Payable for $3,552,000.
Therefore, the correct answer is: option a). credit to Bonds Payable for $3552000.
Step-by-step explanation:
If bonds are issued at par or face value on an interest date, the entry is straightforward: Cash is debited and Bonds Payable is credited for the total dollar amount of the bond issue.
In this case, the correct journal entry to record the issuance of the bonds will include a debit to Cash for $3,552,000 and a credit to Bonds Payable for $3,552,000.
This is because the company is receiving cash from the bond issuance, which increases the cash asset, and is also incurring a liability in the form of the Bonds Payable.
The option d)debit to Cash of $3,700,000 is incorrect because the bonds are issued at a discounted price of 96% of face value, resulting in a lower cash inflow than the face value of the bonds.
The option c). debit to Discount on Bonds Payable for $148,000 is also incorrect as it does not correctly reflect the initial issue price and the discount amount.