Impact of a Discount Reagan Enterprises sold 20-year bonds on January 1, 2017. The face value of the bonds was $100,000, and they carry a 9% stated ra interest, which is paid on December 31 of every year. Reagan received $94,100 in return for the issuance of the bonds when the mark rate was 10%. Any premium or discount is amortized using the effective interest method. Required: 1. Identify and analyze the effect of the sale of the bonds on January 1, 2017. Activity Accounts Statement(s) How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the ama box blank. If the effect on a financial statement item is negative, l.e, a decrease, be sure to enter the answer with a minus sign. Remember: If a contra account is increased, it will have the effect of decreasing the corresponding financial statement item. Assets Balance Sheet Stockholders' Liabilities Equity Impact of a Discount Reagan Enterprises sold 20-year bonds on January 1, 2017. The face value of the bonds was $100,000, and they carry a 3% stated rate of interest, which is paid on December 31 of every year. Reagan received $94,100 in return for the issuance of the bonds when the market rate was 10%. Any premium or decount is smarted using the effective interest method Required: 1. Identify and analyze the effect of the sale of the bonds on January 1, 2017 Activity Accounts Statement(s) How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank, If the effect on a financial statement item is negative, 1., a decrease, be sure to enter the answer with a minus sign. Remember if a contre account is increased, it will have the effect of decreasing the corresponding financial statement item. Assets Bonds Payable i Cash Interest Expense Loss on Bonds Premium on Bonds Payable No Entry Balance Sheet Stockholders Liabilities Equity Revenues Income Stater 10:50 AM Prepare a proper balance sheet presentation for January 1, 2017. Reagan Enterprises Balance Sheet (Partial) January 1, 2017 Liabilities 2. Identify and analyze the effect of the payment of interest on December 31, 2017. Activity Accounts Statement(s) How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry and leave the amount box blank. If the effect on a financial statement item is negative, l.e, a decrease, be sure to enter the answer with a minus sign. Remember: if a contra account is increased, it will have the effect of decreasing the corresponding financial statement item. Round the amounts to the nearest whole dollar Balance Sheet Income Statement item is negative, Le, a decrease, be sure to enter the answer with a minus sign. Remember; if a contre account is increased, it will have the effect of decreasing the corresponding financial statement item. Round the amounts to the nearest whole dollar Assets Balance Sheet Income Statement Liabilities Stockholders Equity Revenues Prepare a proper balance sheet presentation for December 31, 2017, Reagan Enterprises Balance Sheet (Partial) December 31, 2017 Liabilities 3. Why it was necessary for Reagan to issue the bonds for only $94,100 rather than $100,000 Because the of interest was greater than the L the issuance price will have to be lower than the face velue Expe