3) Wright Industries needs to raise capital for a factory expansion. The board of directors has just concluded negotiations with an underwriter to issue $2,500.00 of 8%, 15-year callable bonds dated June 30, 2014, with interest payment dates of December 31 and June 30. The bonds are issued on June 30, 2014, at 102.5. Wright's year end is December 31 and straight-line amortization is to be used a) Prepare the necessary journal entries to record the issuance of the bonds on June 30, 2014, and the first interest payment on December 31,2014 b) Show how the bonds will be presented on the December 31, 2014, balance sheet of Wright Industries. Answer a) General Journal Date Accounts Debit Credit June 30 Dec. 31 b) 4) Zhuang Corporation issued S4500 0.95%, eight-year bonds on May 1, 2014. Interest is paid semiannually on November 1 and May l of each year. On the issuance date, the market rate of interest was 8.5%, resulting in a price of 103.5 for these bonds. The effective-interest method of amortizing the premium or discount is used. a) Prepare the journal entry on May I,2014, to issue the bonds b) Prepare the journal entry on November 1, 2014, to record the first interest payment and the amortization of the premium. c) Prepare the adjusting entry on December 31,2014. Answer General Journal Date Accounts Debit Credit a) May 1 b) Nov. 1 c) Dec. 31 5) GenL ink Investment Banking L.td. organized a bond issue for the Jin Company. The size of the issue was S 2,000 JX0 with a stated interest rate of 6% payable on June l and December 1, for each of the next ten years. The bonds were issued on August 1, 2014 with Jin Company receiving 89 1/2. Jin Company amortizes bond premiums and discounts using the effective-interest method. On the date of issue the market interest rate was 7.5% Prepare the following joumal entries a) The entry for Jin Company to record the August 1, 2014 issue. b) The entry on December 1, 2014 c) The December 31, 2014 adjusting entry. Answer General Journal Date Accounts Debit Credit a) Aug. 1 b) Dec. 1 c) Dec. 31