Blanding Company issues $1,000,000 of 8%, 10-year bonds at 98 on February 28, 2013. The bond pays interest every February 28. The journal entry to record the issuance would include a debit to Cash for $1,000,000. credit to Bonds payable for $980,000. credit to Discount on bonds payable for $20,000. debit to Cash for $980,000.

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Blanding Company issues $1,000,000 of 8%, 10-year bonds at 98 on February 28, 2013

Accounting Mar 18, 2021

Blanding Company issues $1,000,000 of 8%, 10-year bonds at 98 on February 28, 2013. The bond pays interest every February 28. The journal entry to record the issuance would include a

1. debit to Cash for $1,000,000.
2. credit to Bonds payable for $980,000.
3. credit to Discount on bonds payable for $20,000.
4. debit to Cash for $980,000.

Expert Solution

Answer:

d .

Step-by-Step explanation

Journal entry for issuance of bond:

Cash a/c .......Dr 980,000

Discount on bond payable a/c .......Dr 20,000

To bond payable a/c 1,000,000

Therefore, the correct option is D.

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