A company issues $90,000 of 9%, 10-year bonds dated January 1 that pay interest semiannually on June 30 and December 31 each year. If bonds are sold at par value, the issuer records the payment of principal at maturity with a (debit/credit) to bond payable in the amount of .

a. debit

b. $90,000

Explanation:

The complete journal entries for the payment of principal at maturity is to debit  bond payable in the amount of $90,000, and credit cash  in the amount of $90,000 also. This will appear in the book as follows:

Details                                    Dr ($)                     Cr ($)

Bond payable                       90,000

Cash                                                                    90,000

Being the bond payment of principal at maturity.            

Therefore, if bonds are sold at par value, the issuer records the payment of principal at maturity with a debit to bond payable in the amount of $90,000.