On January 1, Multichip Corporation Issued $2,000,000, 10-Year, 8% Bonds

question 92

Multiple Choice

On January 1, Multichip Corporation issued $2,000,000, 10-year, 8% bonds at 102. The journal entry to record this transaction would include a:

• A) credit to bonds payable $2,040,000.
• B) debit to discount on bonds payable $40,000.
• C) debit to cash $2,000,000.
• D) credit to premium on bonds payable $40,000.