What is the correct journal entry for issuing \$50,000 of bonds at a 110% premium?

• A. Debit Cash \$50,000; Credit Bonds Payable \$55,000
• B. Debit Cash \$55,000; Credit Bonds Payable \$50,000; Credit Premium on Bonds Payable \$5,000
• C. Debit Cash \$55,000; Credit Bonds Payable \$55,000
• D. Debit Cash \$50,000; Credit Premium on Bonds Payable \$5,000

Answer: (B)