JournaldrillBonds issued at a premium
A journal entry exercise from Journaldrill. Solve it with an account picker and debit and credit fields in your browser, and it is checked the moment you submit.
The task
On January 1, an interest payment date, Meadowbrook Hospital Group issues $300,000 of 8-year, 9% bonds at 104.
What this exercise teaches
Cash is $300,000 x 104% = $312,000. The $312,000 - $300,000 = $12,000 excess is the premium.
A hint if you get stuck
Bonds Payable stays at face value; the extra cash goes to an adjunct liability account.
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