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Garcia company issues 8.00%, 15-year bonds with a par value of $290,000 and semiannual interest payments. on the issue date, the annual market rate for these bonds is 6.00%, which implies a selling price
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Garcia company issues 8.00%, 15-year bonds with a par value of $290,000 and semiannual interest payments. on the issue date, the annual market rate for these bonds is 6.00%, which implies a selling price of 114 3/4.

User Alexey Biryukov
by
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1 Answer

5 votes

Answer:

Journal Entry

Step-by-step explanation:

The Journal entry is shown below:-

Cash Dr, $332,746

To Bonds payable $290,000

To premium of the issue on bonds $42,746

(Being bonds issued for cash premium is recorded)

Working note

Selling price of bonds = $290,000 × 114.75%

= $332,746

User Edorka
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