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If ABC Company issues 100 of its $1,000 bonds at a price of 110, the journal entry using the net method will include which of the following entries?
a. A debit to interest expense of $10,000
b. A debit to cash of $90,000
c. A debit to cash of $110,000
d. A credit to bonds payable of $110,000

Answer :

Bonds payable appear on the legal responsibility side of the company's balance sheet. Generally, bonds payable fall in the non-current category of liabilities.

What is the journal entry for recording the bond maturity?

Make a journal entry at bond maturity.

When the bond comes to maturity, the face value is given to the investor in cash. The journal entry for recording the maturation of a bond calls for a credit score to Cash and a debit to Bonds Payable, each in the amount of the bond's face value.

How do you calculate bonds payable?

It is calculated by means of multiplying the $11,246 (carrying price of the bonds) times 10% (market activity rate) × / (semiannual payment). The amount of pastime paid is $600 ($10,000 face value of bonds × 12% coupon activity rate × / semiannual payments).

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