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Neutron Corp. issued $2,000,000 par value, 8%, 5-year bonds on December 31, 2010. Interest is to be paid semiannually on June 30 and December 31.

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Neutron Corp. issued $2,000,000 par value, 8%, 5-year bonds on December 31, 2010. Interest is to be paid semiannually on June 30 and December 31. The bonds were sold when the market rate of interest was 10%. The company uses the effective interest method of amortization. Required: a. Calculate the issue price of the bond. (2 marks) b. Prepare all the journal entries required, with dates, relating to this bond for the years 2010 and 2011. (7 marks) c. Show, in good form, how the bonds will be presented on the balance sheet on December 31, 2011

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