Arroyo Company issued $600,000, 10-year, 6% bonds at 103.

Instructions

(a)

Prepare the journal entry to record the sale of these bonds on January 1, 2017.

(b)

Suppose the remaining Premium on Bonds Payable was $10,800 on December 31, 2020. Show the balance sheet presentation on this date.

(c)

Explain why the bonds sold at a price above the face amount.