On January 1, Parson Freight Company issues 7.0%, 10-year bonds with a par value of $4,500,000. The bonds pay interest semiannually. The market rate of interest is 8.0% and the bond selling price was $4,194,222. The bond issuance should be recorded as:

Question

Answer

Debit Cash $4,500,000; credit Bonds Payable $4,500,000.

Answer

Debit Cash $4,194,222; credit Bonds Payable $4,194,222.

Answer

Debit Cash $4,500,000; credit Bonds Payable $4,194,222; credit Discount on Bonds Payable $305,778.

Answer

Debit Cash $4,194,222; debit Discount on Bonds Payable $305,778; credit Bonds Payable $4,500,000.

Answer

Debit Cash $4,194,222; debit Interest Expense $305,778; credit Bonds Payable $4,500,000.

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On January 1, Parson Freight Company issues 7.0%, 10-year bonds with a par value...

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