Impact of a Discount Vasily Inc. sold 20-year bonds on January 1, 2016. The face value of the bonds was $100,000, and they carry a 9% stated rate of interest, which is paid on December 31 of every year. Vasily received $92,900 in return for the issuance of the bonds when the market rate was 10%. Any premium or discount is amortized using the effective interest method. Required: 1. Prepare the journal entry to record the sale of the bonds on January 1, 2016. How does this entry affect the accounting equation? Indicate the effect on financial statement items by selecting" for decrease (or negative effect), "+" for increase (or positive effect) and "NE" for No Entry (or no effect) on the financial statement. Date Description 2016 Jan. 1 Journal Debit Credit Assets Prepare a proper balance sheet presentation for January 1, 2016. Vasily Inc. Balance Sheet (Partial) January 1, 2016 Balance Sheet Liabilities Stockholders' Equity Revenues Income Statement Net Expenses Income 2. Prepare the journal entry to record interest expense on December 31, 2016. How does this entry affect the accounting equation? Indicate the effect on financial statement items by selecting "-" for decrease (or negative effect), "+" for increase (or positive effect) and "NE" for No Entry (or no effect) on the financial statement. Journal Date Description 2016 Dec. 31 Debit Credit Assets Prepare a proper balance sheet presentation for December 31, 2016. Vasily Inc. Balance Sheet (Partial) December 31, 2016 Balance Sheet Stockholders' Liabilities + Equity Revenues Income Statement Net Expenses Income