Saberhagen Ltd. sold Rs3,500,000, 8%, 10-year bonds on January 1, 2017. The bonds were dated January 1, 2017, and pay interest annually on January 1. Saberhagen Company uses the straight-line method to amortize bond premium or discount.
Instructions
(a) Prepare all the necessary journal entries to record the issuance of the bonds and bond interest expense for 2017, assuming that the bonds sold at 104.
(b) Prepare journal entries as in part (a) assuming that the bonds sold at 98.
(c) Show the statement of fi nancial position presentation for the bonds at December 31, 2017, for both the requirements in (a) and (b).