Instructions X Beral Corporation sold 20 year bands 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. Berol received $91,526 in return for the issuance of the bords when the market rate was 10%. Any premium or discount is amortized using the effective interest method. General Joumal Required: 1. Prepare the journal entry to record the sale of the bands on January 1, 2016. and the proper balance sheet presentation on this data 1a. Prepare the journal entry with the impact on the financial statements to record the sale of the bands on January 1, 2016. Round answers to whole 2. Prepare the oumal entry to recand interest expanse on Desember 31, 2016, and the proper dallars balance sheet presentation on this date. 3. Explain why it was necessary for Beror to issue the bovids for only $91,528 rather than $100,000 General Soumal Instructions Chart of Accounts ........... Berol Corporation PAGE 1 General Ledger GENERAL JOURNAL IMPACT ON FINANCIAL STATENENTS BALANCE SHEET INCOME STATEMENT ASSETS REVENUE POST DATE MCCOUNT TITLE REF DEBIT CREDIT ASSETS LIABILITIEQUITY REVENUEEXPENSENCETE 111 Cash 411 Sales Revenue 1 121 Announts Receivable 141 Inventory EXPENSES 152 Prepaid insurance 5 500 Coet of Goods Sold 154 Supples 521 Salaries and Wages 174 Equipment Expense 179 Accumulated Depreciation 532 Utilities Expense 2. Prepare the journal entry with the impact on the francial statements to record vierest expense on December 31, 2016. Round answers whicle 533 Insuranon Expense dollars. LIABILITIES 534 Rent Experse 211 Acoounts Payable 537 Supplies Expense 231 Salaries and Wages 541 Depreciation Expanse PAGE 1 Payable 551 Advertising Expanse IMPACT ON FINANCIAL STATEMENTS GENERAL JOURNAL 235 Notes Payable 559 Miscellaneous Expenses BALANCE SHEET INCOME STATEMENT 240 Bonde Payable 810 Interest Expense DATE ACCOUNT TITLE DEBIT Rar CREDIT 241 Discount on Bonde Payable ASSETS LIABILITIEQUITY REVENUEEXPENSENCEME 910 Income Tax Expense 242 Premium on Bonds Payable 1 281 Income Taxes Payable 2 9 2 EQUITY 311 Capital Stock 331 Retained Earnings Balance Sheet 1b. Prepare a proper balance sheet presentation for January 1, 2016. Final Question Balance Sheet Instructions 3. Why was it necessary for Berol to issue the bonds for only $91,526 rather than $100,000? Berol Corporation Balance Sheet (Partial) January 1, 2016 1 2 The bonds were issued for less than face value because the interest rate on the bonds is what can be earned on the market. Berol Corporation had to sell the bonds at a to bring the rate of interest in line with the market interest rate. 3 2b. Prepare a proper balance sheet presentation for December 31, 2016. Berol Corporation Balance Sheet (Partial) December 31, 2016 1 2 3