Assume the same set of facts for Berol Corporation as in Exercise 10-16 except that it received

Question:

Assume the same set of facts for Berol Corporation as in Exercise 10-16 except that it received $109,862 in return for the issuance of the bonds when the market rate was 8%.

Required

1. Identify and analyze the effect of the sale of the bonds on January 1, 2017, and the proper balance sheet presentation on this date.

2. Identify and analyze the effect of the payment interest on December 31, 2017, and indicate the proper balance sheet presentation on this date.

3. Explain why the company was able to issue the bonds for $109,862 rather than for the face amount.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...