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On January 1, a company issues bonds dated January 1 with a par value of $370,000. The bonds mature in 5 years. The contract rate is 11%, and interest is paid semiannually on June 30 and December 31. The market rate is 10% and the bonds are sold for $384,280. The journal entry to record the issuance of the bond is: Multiple Choice Debit Cash $384,280; credit Discount on Bonds Payable $14,280; credit Bonds Payable $370,000. Debit Cash $384,280; credit Premium on Bonds Payable $14,280; credit Bonds Payable $370,000. Debit Cash $384,280; credit Bonds Payable $384,280. Debit Cash $370,000; debit Premium on Bonds Payable $14,280; credit Bonds Payable $384,280. Debit Bonds Payable $370,000; debit Bond Interest Expense $14,280; credit Cash $384,280.

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Answer and Explanation:

The journal entry is shown below:

Cash Dr $370,000

Discount on bond payable Dr $14,280

            To Bond payable $384,280

(Being the issuance of the bond is recorded)

For recording this we debited the cash as it increase the assets and credited the bond payable as it also increased the liabilities and the difference is debited to the discount on bond payable

This is the answer but the same is not given in the options

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