E10-11 Recording Bond Issue and First Interest Payment with Premium (with Premium Account) LO10-3 On January 1 of this year, Bochini Corporation sold a $10 million, 8.25 percent bond issue. The bonds were also dated January 1, had a yield of 8 percent, pay interest each December 31, and mature 10 years from the date of issue. Use Table 9C.1, Table 9C.2. Required: 1. Prepare the journal entry to record the issuance of the bonds. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round time value factor to 4 decimal places. Enter your answers in dollars not in millions rounded to the nearest whole dollar.) * Answer is complete but not entirely correct. No Date Debit Credit 1 January 01 10,167,716 General Journal Cash Bonds payable Premium on bonds payable 10,000,000 167,716 X 2. Prepare the journal entry to record the interest payment on December 31 of this year. Use effective-interest amortization and a premium account. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round time value factor to 4 decimal places. Enter your answers in dollars not in millions rounded to the nearest whole dollar.) Answer is complete but not entirely correct. No Date General Journal Debit Credit 1 December 31 813,417 X Interest expense Premium on bonds payable 11,583 X Cash 825,000 3. Show how the bond interest expense and the bonds payable should be reported on the annual financial statements for this year. (Enter your answers in dollars not in millions rounded to the nearest whole dollar.) Answer is complete but not entirely correct. BOCHINI CORPORATION Financial Statements For year ended December 31 Statement of earnings: Bond interest expense $ 813,420 Statement of financial position Long-term liabilities: Bonds payable 10,000,000 156,172 Plus: Unamortized premium $ 10,156,172