Grouper Corporation sold 2510000 8 5year bonds on January 1

Grouper Corporation sold $2,510,000, 8%, 5-year bonds on January 1, 2017. The bonds were dated January 1, 2017, and pay interest on January 1. Grouper Corporation uses the straight-line method to amortize bond premium or discount.

(2) Show the balance sheet presentation for the bond issue at December 31, 2017, using the 99 selling price. GROUPER CORPORATION Balance Sheet (Partial)

Solution

Balance sheet presentation

Balance sheet (partial)

For the year ended december 31,2017

Discount on bonds payable = 2510000*1% = 25100

Discount amortized = 25100/5 = 5020

Unamortized discount = 25100-5020 = 20080

Current liabilities
Interest payable		200800
Long term liabilities
Bonds payable	2510000
Less;
Discount on bonds payable	-20080	2489920