Questions: On December 31 Wintergreen, Incorporated, issued 150,000 of 7 percent, 10-year bonds at a price of 93.25.

To record the issuance of bonds by Wintergreen, Incorporated, we need to make a journal entry that reflects the cash received and the bond liability. The bonds were issued at a price of 93.25, which means they were sold at a discount (less than their face value). Here's how you would record this transaction:

1. Calculate the cash received from the bond issuance:

   • Face value of the bonds = $150,000
   • Issuance price = 93.25% of face value
   • Cash received = $150,000 * 93.25% = $139,875

2. Calculate the discount on bonds payable:

   • Discount = Face value - Cash received
   • Discount = $150,000 - $139,875 = $10,125

Now, we can prepare the journal entry:

\[ \begin{tabular}{|c|c|c|c|} \hline S.No/Date & Account Title & Debit & Credit \\ \hline December 31 & Cash & \$139,875 & \\ \hline & Discount on Bonds Payable & \$10,125 & \\ \hline & Bonds Payable & & \$150,000 \\ \hline \end{tabular} \]

Explanation:

• Cash is debited for the amount received from the bond issuance, which is $139,875.
• Discount on Bonds Payable is debited for the difference between the face value and the cash received, which is $10,125. This represents the discount on the bonds.
• Bonds Payable is credited for the face value of the bonds, which is $150,000. This represents the liability that the company has to repay at maturity.