16. On the first day of the current fiscal year, Jones Co. Sold $5,000,000 of 10-year, 11% bonds, with interest payable semi-annually, for $4,800,000.

Present entries to record the following transactions on Jones Co. books for the current fiscal year:

A. Issuance of the bonds at a $200,000 discount.

B. First semi-annual interest payment and the discount is recorded as an adjusting entry on 12/31.

C. Amortization of the bond discount for the year-12 months (1/10th), using the straight-line method of amortization.

17. On September 1, 2016 Rockwell Co. issued $2,000,000 of 20-year, 15% bonds, dated August 1, for $2,240,000 and one months accrued interest of $25,000, (total cash paid $2,265,000). The bonds were purchased by IBM. Interest is payable semiannually on February 1 and August 1. You should credit Interest Expense for the one months' accrued interest. Rockwell will have to pay six months interest to the bondholder (investor).

Present the entries to record the following transactions for the current year on the books of the issuer-Rockwell Co.:

A. Issuance of the bonds.

B. Accrual of five months interest and amortization of bond premium for the year, on December 31, using the straight-line method.

C. Payment of the interest to the bondholders on Feb. 1, 2017.

Interest Expense

Interest Payable

Cash

18. Indicate the section where each of the following items would be reported on the corporation balance sheet at 12/31/16.

Use the following abbreviations to report the relevant balance sheet section:

CA = Current Asset

I = Investments

PA = Plant Assets

IA = Intangible Assets

CL = Current Liabilities

LTL = Long-Term Liabilities

DC = Deferred Credits

PIC = Paid-In Capital

RE = Retained Earnings

A. Interest payable

B. Marketable securities

C. Equipment

D. Bond sinking fund

E. Excess of issue price over par of common stock

F. Accounts receivable

G. Unamortized Discount on Bonds Payable (on bonds due in year 2017).