Question

On the issuance date, Saucedog Inc. had a Bonds Payable account with a balance of $55,000,000 and Premium on Bonds Payable account with a balance of $5,000,000. How much cash did Saucedog Inc. collect when these bonds were issued

Answer 1

the cash collected in the case when the bonds are issued is $60,000,000

Step-by-step explanation:

The computation of the cash collected in the case when the bonds are issued is shown below:

Bonds payable [Face value] $55,000,000

Add: Premium on Bonds payable [Unamoritzed] $5,000,000

Issue price of the bonds $60,000,000

Hence, the cash collected in the case when the bonds are issued is $60,000,000