Answer:
Dr cash $85,959
Cr bonds payable $76,000
Cr premium on bonds payable $9,959
Dr interest expense $2,586
Dr premium on bonds payable $314
Cr cash $2,900
Explanation:
The cash realized from bond issuance is $85,959,which means that the bonds were issued at a premium $9959 ($85,959-$76,000).
In effecting the issuance in the books of accounts,cash account would be debited with $85,959 while bonds payable and premium on bonds payable are credited with $76,000 and $9,959 respectively.
The interest payment was $2,900,credited to cash and $2,586 and $314 are debited to interest expense and premium on bonds payable respectively.
