multiple choice question\na company issues $75,000 of 6%, 10 - year bonds dated january 1 that pay interest…

multiple choice question\na company issues $75,000 of 6%, 10 - year bonds dated january 1 that pay interest semiannually on each june 30 and december 31. if the issuer accepts $69,000 for the bonds, the issuer will record the sale with a debit to which of the following accounts?\n\nbond payable\ncash and discount on bonds payable\ncash\ncash and interest expense

multiple choice question\na company issues $75,000 of 6%, 10 - year bonds dated january 1 that pay interest semiannually on each june 30 and december 31. if the issuer accepts $69,000 for the bonds, the issuer will record the sale with a debit to which of the following accounts?\n\nbond payable\ncash and discount on bonds payable\ncash\ncash and interest expense

Answer

Brief Explanations:

When a company sells bonds and receives cash, it debits the Cash account for the amount of cash received. Here, the company accepts $69,000 for the bonds, so it will debit the Cash account. The discount on bonds payable is recorded separately when the bond's face - value is higher than the issue price, but the initial debit is to Cash for the amount actually received. Interest expense is not part of the initial bond - issuance entry.

Answer:

C. Cash