1. ABC company issued $800,000 11, 10 year bond on December 31, 2017 when the market rate for this type of bond is 12%. Interest is payable annually on December 31.ABC uses the straight-line method to amortize bond premium or discount.

a. How much will you receive? prepare the entry to issue the bond.

b. Record the entry to show the interest expense and the bond premium or discount amortization on December 31, 2019?

c. what entry is made at the end of the 10 years to redeem (pay) the bonds at maturity after the last interest payment and amortization has been done?

2. You borrow $2000 and gave a note discounted for 5% for 5 months. The note was discounted up front. Prepare the journal entry to issue the note.