This post addresses a journal entry for a bond sale.
Not what you're looking for?
Lakeland Homebuilders recently sold $400,000 worth of 8% semiannual bonds at 95 to J. Ferguson Underwriting. What would the journal entry look like to record the sale of the bonds?
Entry Account&Description DEBIT CREDIT
1. Bonds Payable 400,000
Cash 400,000
2. Cash 380,000
Discount on Bonds Payable 20,000
Bonds Payable 400,000
3. Bond Interest Expense 15,200
Cash 15,200
4. Cash 400,000
Premium on Bonds Payable 12,000
Bonds Payable 380,000
Bond Interest Expense 32,000
CHOICES..
A. Item 3 is the correct entry
B. Item 2 is the correct entry
C. Item 4 is the correct entry
D. Item 1 is the correct entry
Purchase this Solution
Solution Summary
The solution provides the correct journal entry for Lakeland Homebuilders to record the sale of the associated bonds.
Solution Preview
2. Cash 380,000
Discount on Bonds Payable 20,000
Bonds Payable 400,000
This is the correct answer ...
Purchase this Solution
Free BrainMass Quizzes
IPOs
This Quiz is compiled of questions that pertain to IPOs (Initial Public Offerings)
Lean your Process
This quiz will help you understand the basic concepts of Lean.
Organizational Behavior (OB)
The organizational behavior (OB) quiz will help you better understand organizational behavior through the lens of managers including workforce diversity.
Organizational Leadership Quiz
This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.
Marketing Management Philosophies Quiz
A test on how well a student understands the basic assumptions of marketers on buyers that will form a basis of their marketing strategies.