Parrish Industries has bonds outstanding(originally sold for $5,400,000) in theamount of $6,000,000 with a current bonddiscount at 104 on the market at its yearend. What should be the balance of the FairValue Adjustment on Bonds Payable? Showyour work.A. $840,000 debit balanceB. $340,000 debit balanceC. $840,000 credit balanceD. $340,000 credit balance

Bonds payable is the payable of the bonds which has been issued by the company and which is the…

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end. What should be the balance of the Fair on Bonds Payable? Show Value Adjustment your work.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 15MC: Naval Inc. issued $200,000 face value bonds at a discount and received $190,000. At the end of 2018,...

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Question

Parrish Industries has bonds outstanding
(originally sold for $5,400,000) in the
amount of $6,000,000 with a current bond
discount at 104 on the market at its year
end. What should be the balance of the Fair
Value Adjustment on Bonds Payable? Show
your work.
A. $840,000 debit balance
B. $340,000 debit balance
C. $840,000 credit balance
D. $340,000 credit balance

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