On January 1, 20X1, Meister Company issues $200,000 of 6% bonds. Interest of $6,000 is payable semiannually on June 30 and December 31. The bonds mature in 5 years. The bonds were issued at face amount. All the bonds are privately placed with one investor. On the date of issue, the investor should record what journal entry?

Question

Billy Duffy

Business

14 October, 13:35

On January 1, 20X1, Meister Company issues $200,000 of 6% bonds. Interest of $6,000 is payable semiannually on June 30 and December 31. The bonds mature in 5 years. The bonds were issued at face amount. All the bonds are privately placed with one investor. On the date of issue, the investor should record what journal entry?

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Destiny · Answer 1

Debit Credit

Bank/Cash $200,000

Bonds payable $200,000

Explanation:

The journal entry which shall be recorded by Meister Company in its accounts in respect of bonds issued by it, on January 1, 20X1, is mentioned below:

Debit Credit

Bank/Cash $200,000

Bonds payable $200,000