Answer and Explanation:
The journal entry is shown below:
Cash ($5,400,000 × 102%) $5,508,000
To Bonds Payable $5,400,000
To Premium on Bonds Payable $108,000
(To record the issuance of the bond payable)
In the above journal entry, the cash is debited as it increased the assets and credited the bond payable and premium on bond payable as it increased the liabilities
