On 1 September 2013, Bella Company issued $50 million in 10-year, 12% bonds payable. Interest is payable semiannually on 1 March and 1 September. Bond discounts and premiums are amortized at each interest payment date and at year-end. The company's financial year ends at 31 December. Instructions: a. Make all the journal entries related to the bonds in 2013 and 2014 under each of the following assumptions: 1. The bonds were issued at 98. (Round to the nearest dollar.) 2. The bonds were issued at 104. (Round to the nearest dollar.) b. Compute the net bond liability at 31 December 2014, under assumptions 1 and 2 above. (Round to the nearest dollar.) c. Under which of the above assumptions, 1 or 2, would the investor's effective rate of interest be higher? Explain. The bonds were issued at 98. The bonds were issued at 104. Sep 1, 2013 Dec 31, 2013 Mar 1, 2014 Sep 1, 2014 Dec 31, 2014 Dec 31, 2013 $50,000,000 Dec 31, 2014 $50,000,000 Dec 31, 2013 $50,000,000 Dec 31, 2014 $50,000,000 Reporting of bonds on Dec. Bonds payable 31, 2013/2014 Less) Discount... Net bond liability Bonds payable Add) Premium.... Net bond liability