Blanding Company Issues $1 000 000 of 8%, 10- Year

Multiple Choice

Blanding Company issues $1 000 000 of 8%, 10- year debentures at 98 on 28 February 2014. The debenture pays interest on 28 February and 31 August. The market rate of interest on the issue date was 10%. The journal entry to record the issue would include a:

A) credit to Discount on debentures payable for $20 000.
B) debit to Cash for $1 000 000.
C) debit to Cash for $980 000.
D) credit to Debentures payable for $980 000.