question archive Four thousand bonds with a face value of $1,000 each, are sold at 102

Four thousand bonds with a face value of $1,000 each, are sold at 102

Subject:AccountingPrice:3.87 Bought7

Four thousand bonds with a face value of $1,000 each, are sold at 102. The entry to record the issuance is

 
Cash 4,080,000  
Bonds Payable   4,080,000
 
Cash 4,080,000  
Premium on Bonds Payable   80,000
Bonds Payable   4,000,000
 
Cash 4,080,000  
Discount on Bonds Payable   80,000
Bonds Payable   4,000,000
 
Cash 4,000,000  
Premium on Bonds Payable 80,000  
Bonds Payable   4,080,000

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Answer:

Cash (4000*1000*102%) Dr. 4080000

Premium on Bonds Payable (4000*1000*102%) Cr. 80000

Bonds Payable (4000*1000) Cr. 4000000

Option B is the correct answer.

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