contestada

Primo, Inc. issued $50,000, 5-year, 7% bonds that pay interest annually on January 1 when the going market interest rate was 6%. The entry to record the sale of these bonds (net of premiums or discounts), rounded to the nearest $1, includes a ______.

Respuesta :

anthougo

The journal entry by Primo, Inc. to record the sale of these bonds (net of premiums or discounts), rounded to the nearest $1, includes credit to Bonds Payable of $50,000.

What is the correct entry to record the sale of bonds at a premium?

The correct journal entry to record the sale of the bonds at a premium is as follows:

Debit Cash $52,106

Credit Bonds Payable $50,000

Credit Bonds Premium $2,106

Data and Calculations:

N (# of periods) = 5

I/Y (Interest per year) = 6%

PMT (Periodic Payment) = $3,500 ($50,000 x 7%)

FV (Future Value) = $50,000

Results:

PV = $52,106.18

Sum of all periodic payments = $17,500 ($3,500 x 5)

Total Interest $9,163.49

Thus, the journal entry by Primo, Inc. to record the sale of these bonds (net of premiums or discounts), rounded to the nearest $1, includes credit to Bonds Payable of $50,000.

Learn more about recording the sale of bonds at https://brainly.com/question/14806909

Otras preguntas