Problem
On July 1, 2016, Salem Corporation issued $3 million of 12% bonds payable in 10 years. The bonds pay interest semiannually. The bonds include detachable warrants giving the bondholder the right to purchase for $30, one share of $1 par value common stock at any time during the next 10 years. Salem sold the bonds for $3 million. The value of the warrants at the time of issuance was $200,000.
Required:
Prepare in general journal format the entry to record the issuance of the bonds.