On January 1 of 2015, Parson Freight Company issues 7%, 10-year


Question Description:

24.99

On January 1 of 2015, Parson Freight Company issues 7%, 10-year bonds with a par value of $2,000,000. The bonds pay interest semi-annually. The market rate of interest is 8% and the bond selling price was $1,864,097. The bond issuance should be recorded as: A. Debit Cash $2,000,000; Credit Bonds Payable $2,000,000. B. Debit Cash $1,864,097; Credit Bonds Payable $1,864,097. C. Debit Cash $2,000,000; Credit Bonds Payable $1.864.097; Credit Discount on Bonds Payable $135,903. D. Debit Cash $1,864,097; Debit Discount on Bonds Payable $135,903; Credit Bonds Payable $2,000,000. E. Debit Cash $1,864,097; Debit Interest Expense $135,903; Credit Bonds Payable $2,000,000.

Answer

24.99