Indigo Corporation sold $3,100,000, 8%, 5-year bonds on January 1, 2022. The bonds were dated January 1, 2022, and pay interest on January 1. Indigo Corporation uses the straight-line method to amortize bond premium or discount. - Your answer is partially correct. Prepare all the necessary journal entries to record the issuance of the bonds and bond interest expense for 2022, assuming that the bonds sold at 106. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Jan. 1 Cash 3286000 Premium on Bonds Payable 286000 Bonds Payable 3100000 Dec. 31 Interest Expense 285200 Premium on Bonds Payable 37200 Interest Payable D C 248000 eTextbook and Media Solution Assistance Used Jan. 1 Cash = ($3,100,000 x 106%) = $3,286,000 Dec. 31 Premium on Bonds Payable = ($186,000 - 5) = $37,200 Interest Payable = ($3,100,000 8%) = $248,000 (Amortization of Premium = (Cash received - Face value of bond) = Number of interest periods) $37,200 = ($3,286,000 - $3,100,000) = 5 List of Accounts - Your answer is partially correct. Prepare journal entries to record the issuance of the bonds and bond interest expense for 2022, assuming that the bonds sold at 95. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Jan. 1 Cash 2945000 Discount on Bonds Payable 155000 Bonds Payable N 2 790000 Dec. 31 Interest Expense 279000 Discount on Bonds Payable 31000 Interest Payable 248000 e Textbook and Media Solution Assistance Used Jan. 1 Cash = ($3,100,000 > 95%) = $2,945,000 Dec. 31 Discount on Bonds Payable = ($155,000 = 5) = $31,000 (Amortization of discount = (Face value of bond - Cash received) = Number of interest periods) $31,000 = ($3,100,000 - $2,945,000) = 5 List of Accounts (1) Show the balance sheet presentation for the bond issue at December 31, 2022, using the 106 selling price. INDIGO CORPORATION Balance Sheet (Partial) December 31, 2022 Current Liabilities Interest Payable 248000 Long-term Liabilities Bonds Payable 3100000 Add 9: Premium on Bonds Payable [ 37200 [ 3385200 (2) Show the balance sheet presentation for the bond issue at December 31, 2022, using the 95 selling price. INDIGO CORPORATION Balance Sheet (Partial) December 31, 2022 Current Liabilities Interest Payable 248000 Long-term Liabilities Bonds Payable $ 2790000 Less 4: Discount on Bonds Payable 31000 3007000