On January 1, Year 1, Hanover Corporation issued bonds with a $59,000 face value, a stated rate of interest of 7%, and a 5-year term to maturity. The bonds were issued at 98. Hanover uses the straight-line method to amortize bond discounts and premiums. Interest is payable in cash on December 31 each year.
The journal entry used to record the issuance of the bond and the receipt of cash would be: (Round your answer to the nearest whole dollar amount.)
Cash 59,000â Discount on Bonds Payable 236â
Bonds Payable 58,764â
Cash 58,764â Discount on Bonds Payable 236â Bonds Payable 59,000â
Cash 57,820â Discount on Bonds Payable 1180â Bonds Payable 59,000â
Cash 59,000â Bonds Payable 59,000â