Pettigrew Company sold $6,000,000, 8%, 20-year bonds on January 1, 2010. The bonds were dated January 1,

Question:

Pettigrew Company sold $6,000,000, 8%, 20-year bonds on January 1, 2010. The bonds were dated January 1, 2010, and pay interest on December 31. The bonds were sold at 98.
Instructions
(a) Prepare the journal entry to record the issuance of the bonds on January 1, 2010.
(b) At December 31, 2010, $6,000 of the bond discount had been amortized. Show the presentation of the bond liability at December 31, 2010. (Assume that interest has been paid.)
(c) At December 31, 2011, when the carrying value of the bonds was $5,892,000, the company redeemed the bonds at 102. 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...