Horngren Corporation issues 20-year bonds with a face value of $15,000,000 and a stated annual interest...
Horngren Corporation issues 20-year bonds with a face value of $15,000,000 and a stated annual interest rate of 6%. The bonds pay interest semiannually on June 30 and December 31. The market rate of interest on the date of issue is 6%.
what is the journal entry the company would make on the date the bonds are issued?
Homework Answers
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| Date | Account | Debit | Credit | |
| Date of Issue | Cash | $ 15,000,000 | ||
| Bond Payable | $ 15,000,000 | |||
| (To record issuance of bond at par value) | ||||
Since market rate of interest and state rate of interest are same, these bonds have been issued at par without any discount or premium.
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