Guehler Electric sold $2,000,000, 9%, 10-year bonds on January 1, 2014. The ecrual traight-li ; : ideale ial EE bonds were dated January 1 and pay interest July 1 and January 1. Guehler Electric uses amortization for 2 years. : 5 3 ; : 3 ; the straight-line method to amortize bond premium or discount. The bonds were sold at

(LO 5, 11) 104. Assume no interest is accrued on June 30.

Instructions

(a) Prepare the journal entry to record the issuance of the bonds on January 1, 2014.

(b) Amortization $4,000

(b) Prepare a bond premium amortization schedule for the first 4 interest periods.

(d) Premium on bonds

(c) Prepare the journal entries for interest and the amortization of the premium in 2014 payable $64,000 and 2015.

Prepare entries to record issu-

(d) Show the balance sheet presentation of the bond liability at December 31, 2015.

ance of bonds, interest, and