How would you balance the journal entry for issuing zero coupon bonds with a face value of \$80,000 at a 12% discount?

• A. Debit Cash \$80,000, Credit Bonds Payable \$80,000
• B. Debit Cash \$70,400, Credit Bonds Payable \$80,000, Debit Discount on Bonds Payable \$9,600
• C. Debit Cash \$80,000, Credit Bonds Payable \$70,400, Credit Discount on Bonds Payable \$9,600
• D. Debit Cash \$70,400, Credit Bonds Payable \$70,400

Answer: (B)