Can you folks give me an answer to check what I came up with which was $57,000

Accounting Aug 08, 2020

Can you folks give me an answer to check what I came up with which was $57,000. "XYZ Corp decides to issue(sell) a $50,000 one year bond, at 10% bonds to yield an issue price of $52,000. What would be the amount I would need to record as a journal entry as a credit to Bonds Payable?

Expert Solution

Journal entry to be passed at the time of issue of born will be recorded at the amount at which the bond has been issued. The yield on the bond will not be recorded at the initial stage of issuing the bond. Also so if the bond is issued at a premium price then the amount at which the bond is issued is to be recorded in the journal entry.

In this case the company has issued the bond at issue price of $52,000 therefore the amount that would need to be recorded as a general entry as a credit to bonds payable will be $52,000.

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