Presented below is a partial amortization schedule for Discount Foods:

Period Cash Interest Carrying Increase in

Issue Paid Expense Value Carrying

Date Value

$ 74,700

1 $ 2,500 $ 2,984 $ 484 75,184

2 2,500 2,996 496 75,680

1. Record the bond issue assuming the face value of bonds payable is $80,000. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Dr cash $74,700

Dr discount on bonds payable $5,300

Cr bonds payable $80,000

Explanation:

From all indications,$74,700 cash realized from the bond issue, hence discount on bonds issuance is $5,300 was recorded ($80,000-$74,700)

The cash proceeds would be debited to cash account, with the discount debited to discount on bonds payable account while the face value of $80,000 would be credited to bonds payable account in order to reflect in the account the future cash obligation owed by the company to bondholders.