# Keys Inc. issued 100 bonds with a face value of \$1,000 and a rate of 8% at \$1,025 each. The journal entry to record this transaction includes ________. A. a credit to Bonds Payable for \$102,500 B. a credit to cash for \$102,500 C. a debit to cash for \$100,000 D. a credit to Premium on Bonds Payable for \$2,500

FindFindarrow_forward

### Principles of Accounting Volume 1

19th Edition
OpenStax
Publisher: OpenStax College
ISBN: 9781947172685

#### Solutions

Chapter
Section
FindFindarrow_forward

### Principles of Accounting Volume 1

19th Edition
OpenStax
Publisher: OpenStax College
ISBN: 9781947172685
Chapter 13, Problem 16MC
Textbook Problem
45 views

## Keys Inc. issued 100 bonds with a face value of \$1,000 and a rate of 8% at \$1,025 each. The journal entry to record this transaction includes ________.A. a credit to Bonds Payable for \$102,500B. a credit to cash for \$102,500C. a debit to cash for \$100,000D. a credit to Premium on Bonds Payable for \$2,500

To determine

Concept introduction:

Bonds:

are defined as debt instruments which are usually issued by the company that borrows to its lenders. They are issued at a rate of interest that is specified and for a specified period of time. The bondholders receive a fixed rate of interest on the bonds and the repayment of the bonds is made at the maturity date.

Amortization of Bonds discount or premium:

The Bonds can be issued at a discount or premium. The discount or premium on issue of bonds or the life of bonds is amortized using the effective rate methods or the straight line method.

Journal Entry:

In journal entry company records all the business transactions which are in monetary form. Company records the transaction on debit and credit in journal entry which are always equal.

To choose:

The part of the journal entry for the issue of bonds.

### Explanation of Solution

The journal entry for the issue of bonds is explained is as follows:

 Journal entries Account Title Debit Credit Cash (100 bonds @ \$1025)

### Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

#### The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Find more solutions based on key concepts