{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Untitled Document33

Untitled Document33 - premium on bonds payable for $1,246...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Bonds issued at a premium On July 1, Lighting Process, Inc. issues $10,000 ten-year bonds, with a coupon  rate of interest of 12% and semiannual interest payments payable on June 30  and December 31, when the market interest rate is 10%. The entry to record the  issuance of the bonds increases (debits) cash for the $11,246 received, increases  (credits) bonds payable for the $10,000 maturity amount, and increases (credits) 
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: premium on bonds payable for $1,246. Premium on bonds payable is a contra account to bonds payable that increases its value and is added to bonds payable in the long-term liability section of the balance sheet . General Journal Date Account Title and Description Ref. Debit Credit 20X1 July 1 Cash 11,246 Bonds Payable 10,000 Premium on Bonds Payable 1,246 Issue bonds at a premium...
View Full Document

{[ snackBarMessage ]}

Ask a homework question - tutors are online