IL WeyntanchtKimmel Kieso Accounting Principles 12th Edition

IL Weyntancht,Kimmel, Kieso Accounting Principles, 12th Edition Chapter 15 d) Show the balance sheet presentation of the bond liability at December 31, 2017 | *P15-7C Tyson Corporation sold $4,000,000, 8%, 10-year bonds on January 1, 2017 The bonds were dated January 1, 2017, and pay interest annually on January I. Tyson Corpo- ration 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 2017, assuming that the bonds sold at 103 (b) Prepare journal entries as in part (a) assuming that the bonds sold at 95 (c) Show balance sheet presentation for the bonds at December 31, 2017, for both the requirements in (a) and (b) dP15-8C The following is taken from thes Liam Corp. balance sheet LIAM CORPORATION Balance Sheet (partial) ash

Solution

a. issued at premium:

workings:

issued at discount:

workings:

Date	Account	Debit	Credit
Jan.1	Cash	41,20,000
	Premium on bonds payable		1,20,000
	Bonds payable		40,00,000
Dec.31	Interest expense	3,20,000
	Interest payable		3,20,000
Dec.31	Premium on bonds payable	12,000
	Interest expense		12,000
	Balance sheet presentation
	Long term liabilities:
	Bonds payable 8%, due Jan 1, 2027	40,00,000
	Add: premium unamortised	3,08,000
		43,08,000