Mobbe Company issued $500,000, 15-year, 7% bonds at 96.

Instructions

(a)

Prepare the journal entry to record the sale of these bonds on January 1, 2017.

(b)

Suppose the remaining Discount on Bonds Payable was $12,000 on December 31, 2022. Show the balance sheet presentation on this date.

(c)

Explain why the bonds sold at a price below the face amount.