Crescent Electric sold $5,000,000, 9%, 10-year bonds on January 1, 2012. The bonds were dated January 1

Question:

Crescent Electric sold $5,000,000, 9%, 10-year bonds on January 1, 2012. The bonds were dated January 1 and pay interest on January 1. The bonds were sold at 103.

Instructions
(a) Prepare the journal entry to record the issuance of the bonds on January 1, 2012.
(b) At December 31, 2012, $15,000 of the bond premium had been amortized. Show the long-term liability presentation of the bond liability at December 31,
2012.
(c) At January 1, 2014, when the carrying value of the bonds was $5,120,000, the company redeemed the bonds at 104. Record the redemption of the bonds assuming that interest for the year had already been paid.

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...