Canyon Run Company sold $2,500,000, 8%, 10-year bonds on July 1, 2012. The bonds were dated July

Question:

Canyon Run Company sold $2,500,000, 8%, 10-year bonds on July 1, 2012. The bonds were dated July 1, 2012, and pay interest July 1 and January 1. Canyon Run Company uses the straight-line method to amortize bond premium or discount. Assume no interest is accrued on June 30.
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 104.
(b) Prepare journal entries as in part (a) assuming that the bonds sold at 98.
(c) Show presentation for each bond issue at December 31, 2012.

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...