Question

required information the following information applies to the questions displayed below. ike issues $240,000 of 11%, three-year bonds dated january 1, 2021, that pay interest semiannually on june 30 and december 31. they are issued at $246,087 when the market rate is 10%. required: 1. prepare the january 1 journal entry to record the bonds issuance. journal entry worksheet record the issue of bonds with a par value of $240,000 on january 1, 2021 at an issue price of $246,087. note: enter debits before credits.

Explanation:

Step1: Analyze the cash received

The company receives cash of \( \$246,087 \). So, we debit the Cash account for this amount.

Step2: Analyze the bonds payable (par value)

The par value of the bonds is \( \$240,000 \). We credit the Bonds Payable account for this amount.

Step3: Analyze the premium on bonds payable

The premium is the amount received over the par value. That is \( 246087 - 240000=\$6,087 \). We credit the Premium on Bonds Payable account for this amount.

Answer:

Date	General Journal	Debit	Credit
	Bonds Payable		\( 240,000 \)
	Premium on Bonds Payable		\( 6,087 \)