Blackberry Corporation sold $2,500,000 of 10 year 8% bonds on January 1, 2018. The bonds were dated January 1, 2018 and pay interest on July 1 and January 1. Blackberry uses the straight-line method to amortize and bond premium or discount. Blackberrys year end is December 31.

Instructions:

a. Prepare all the necessary journal entries to record the issue of the bonds and bond interest expense for 2018, assuming:

1. that the bonds sold at 100 (face value)

2. that the bonds sold at 103

3. that the bonds sold at 96

b. Show what the Balance Sheet would look like on December 31, 2018 for each bond issue.