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A company issues $400,000 of 8%, 10-year bonds dated January 1. The bonds pay interest semiannually on June 30 and December 31 each year. If bonds are sold at par value, the issuer records the sale with a (debit/credit) credit to Bond Payable in the amount of $

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If bonds are sold at par value, the issuer records the sale with a (debit/credit) credit to Bond Payable in the amount of $400,000.

Journal entry

Based on the given information assuming the company issue the amount of $400,000 and the bonds are sold at par value the appropriate entry to record the transaction is:

January 1

Debit to Cash $400,000

Credit to Bond Payable $400,000

(To record bond payable)

Inconclusion  If bonds are sold at par value, the issuer records the sale with a (debit/credit) credit to Bond Payable in the amount of $400,000.

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