wong corporation sold 2 000 000 7 5 year bonds on january 1 2012 535181

Wong Corporation sold $2,000,000, 7%, 5-year bonds on January 1, 2012. The bonds were dated January 1, 2012, and pay interest on January 1. Wong Corporation uses the straight-line method to amortize bond premium or discount.

Instructions

(a) Prepare all the necessary journal entries to record the issuance of the bonds and bond interest expense for 2012, assuming that the bonds sold at 102.

(b) Prepare journal entries as in part (a) assuming that the bonds sold at 97.

(c) Show the balance sheet presentation for the bond issue at December 31, 2012, using

(1) the 102 selling price, and then (2) the 97 selling price.

Trinh Co. sold $3,000,000, 8%, 10-year bonds on January 1, 2012. The bonds were dated January 1, 2012, and pay interest on January 1. The company uses straightline amortization on bond premiums and discounts. Financial statements are prepared annually.

Instructions

(a) Prepare the journal entries to record the issuance of the bonds assuming they sold at:

(1) 103.

(2) 98.

(b) Prepare amortization tables for both assumed sales for the first three interest payments.

(c) Prepare the journal entries to record interest expense for 2012 under both of the bond issuances assumed in part (a).

(d) Show the long-term liabilities balance sheet presentation for both of the bond issuances assumed in part (a) at December 31, 2012.