Question

Four thousand bonds with a face value of $1,000 each, are sold at 104. The entry to record the issuance is Group of answer choices Cash 4,160,000 Bonds Payable 4,160,000 Cash 4,000,000 Premium on Bonds Payable 160,000 Bonds Payable 4,160,000 Cash 4,160,000 Premium on Bonds Payable 160,000 Bonds Payable 4,000,000 Cash 4,160,000 Discount on Bonds Payable 160,000 Bonds Payable 4,000,000

Answer 1

Dr Cash 4,160,000

Cr Premium on Bonds Payable 160,000

Cr Bonds Payable 4,000,000

Step-by-step explanation:

Preparation of the entry to record the issuance

Based on the information given The entry to record the issuance is:

Dr Cash $4,160,000

[(4000*1000)*104%]

Cr Premium on Bonds Payable $160,000

($4,160,000-$4,000,000)

Cr Bonds Payable $4,000,000

(4000*1000)

(To record the issuance)