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Untitled Document24 - bonds payable that decreases the value of the bonds and is subtracted from the bonds payable in the long-term liability

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Bonds issued at a discount Lighting Process, Inc. issues $10,000 ten-year bonds, with a coupon interest rate  of 9% and semiannual interest payments payable on June 30 and Dec. 31, issued  on July 1 when the market interest rate is 10%. The entry to record the issuance  of the bonds increases (debits) cash for the $9,377 received, increases (debits)  discount on bonds payable for $623, and increases (credits) bonds payable for  the $10,000 maturity amount. Discount on bonds payable is a contra account to 
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Unformatted text preview: bonds payable that decreases the value of the bonds and is subtracted from the bonds payable in the long-term liability section of the balance sheet. Initially it is the difference between the cash received and the maturity value of the bond. General Journal Date Account Title and Description Ref. Debit Credit 20X1 July 1 Cash 9,377 Discount on Bonds Payable 623 Bonds Payable 10,000 Issue bonds at a discount...
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This note was uploaded on 12/25/2011 for the course FIN 3312 taught by Professor Staff during the Spring '08 term at Texas State.

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