ETech Iniiatives Limited plans to issue 660000 10year 750 pe

E-Tech Iniiatives Limited plans to issue $660,000, 10-year, 7.50 percent bonds. Interest is payable annually on December 31. All of the bonds will be issued on January 1, 2016. Show how the bonds would be reported on the January 2, 2016, balance sheet if they are issued at 102 E.TECH INITIATIVES LIMITED Balance Sheet (partial) As of January 2, 2016 Carrying Value DOLL F3 F4 F9p F10 8 4 5 6 9

Solution

Calculate carrying value of bonds :

Long term liabilties
Bonds payable	660000
Add: Premium on bonds payable	13200
Carrying value	673200