Based on the price that Augusta Enterprises issued the bonds, the journal entries would be:
Date Account title Debit Credit
July 1, 20x5 Cash $97,000
Discount on Bonds payable $3,000
Bonds payable $1,000,000
Date Account title Debit Credit
July 1, 20x5 Cash $1,020,000
Premium on Bonds payable $20,000
Bonds payable $1,000,000
The cash received from the discounted bond is:
= 1,000,000 x 97%
= $970,000
The cash received from the premium bond is:
= 1,000,000 x 102/100
= $1,020,000
The premium is:
= 1,020,000 - 1,000,000
= $20,000
Find out more on journal entries for bonds at https://brainly.com/question/14007158.
#SPJ1
