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    brian08's Avatar
    brian08 Posts: 4, Reputation: 1
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    #1

    Feb 13, 2009, 04:56 PM
    Bonds issue journal entry
    Company A issue 10% bonds par value of $100000 at a discount of 2%.
    Dr Cash $98000
    Dr Discount $2000
    CR Bonds $100000

    1. What is the value carried to the balance sheet? Why?
    2. What is the value on which the company pay interest? Why?
    ROLCAM's Avatar
    ROLCAM Posts: 1,420, Reputation: 23
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    #2

    Feb 13, 2009, 09:10 PM

    The three items are ultimately carried to the balance sheet.

    1) The cash as a Current Asset.
    2) The discount finishes in the Accumulated
    Losses.
    3) The Bonds int the Equity Balance.

    #############################

    The Company will pay Interest on the
    whole $100,000 value on the Bonds.

    ##############################
    brian08's Avatar
    brian08 Posts: 4, Reputation: 1
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    #3

    Feb 14, 2009, 05:06 PM
    Would the amount in the Equities section be $98000 or $100000?
    ROLCAM's Avatar
    ROLCAM Posts: 1,420, Reputation: 23
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    #4

    Feb 14, 2009, 09:02 PM

    It would definitely be $100,000.
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