On January 1, 2016, Phoenix Corporation issued 10-year $200,000 bonds with a 6%

Q: On January 1, 2016, Phoenix Corporation issued 10-year $200,000 bonds with a 6%

Answer: C: credit to Premium on bonds payable $6000 Explanation to the answer: Description Debit $ Credit $ Cash (103%*200,000) 206000 To Bonds Payable 200,000 To Premium on bonds payable 6000 Description Debit $ Credit $ Cash (103%*200,000) 206000 To Bonds Payable 200,000 To Premium on bonds payable 6000

ID: 2580302 • Letter: O

Question

On January 1, 2016, Phoenix Corporation issued 10-year $200,000 bonds with a 6% stated rate interest at 103. Phoenix Corporation pays the interest annually on December 31 and uses the straight-line amortization method. The general journal entry to issue these bonds includes

A. A debit to Premium on Bonds Payable for $6,000

B. A debit to Discount on Bonds Payable for $6,000

C. A credit to Premium on Bonds Payable for $6,000

D. A credit to Discount on Bonds Payable for $6,000

Explanation / Answer

Answer:

C: credit to Premium on bonds payable $6000

Explanation to the answer:

Description

Debit $

Credit $

Cash (103%*200,000)

206000

To Bonds Payable

200,000

To Premium on bonds payable

6000