On the Date of Issue Radisch Corporation Sells $5 Million $\begin{array}{cc} \text {Bonds Payable } & \text { Discount on Bonds Payable } \\\end{array}$

Short Answer

On the date of issue Radisch Corporation sells $5 million of 5-year bonds at 98. The entry to record the sale will include the following debits and credits: $\begin{array}{cc} \text {Bonds Payable } & \text { Discount on Bonds Payable } \\\end{array}$
A) $\begin{array}{ll}\$ 4,900,000 \mathrm{Cr} . & \$ 0 \mathrm{Dr} . \\\end{array}$
B) $\begin{array}{ll}\$ 5,000,000 \mathrm{Cr} . & \$ 100,000 \mathrm{Dr} . \\\end{array}$
C) $\begin{array}{ll}\$ 4,900,000 \mathrm{Cr} . & \$ 1,200,000 \mathrm{Dr} . \\\end{array}$
D) $\begin{array}{ll}\$ 5,000,000 \mathrm{Cr} . & \$ 10,000 \mathrm{Dr} .\end{array}$