On June 30, 2020, Pronghorn Company issued $3,270,000 face value of 13%, 20-year bonds at $3,516,000, a yield of 12%. Pronghorn uses the effective-interest method to amortize bond premium or discount. The bonds pay semiannual interest on June 30 and December 31.

(a)

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Your answer is correct.

Prepare the journal entries to record the following transactions. (Round answer to 0 decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

(1)		The issuance of the bonds on June 30, 2020.
(2)		The payment of interest and the amortization of the premium on December 31, 2020.
(3)		The payment of interest and the amortization of the premium on June 30, 2021.
(4)		The payment of interest and the amortization of the premium on December 31, 2021.

No.	Date	Account Titles and Explanation	Debit	Credit
(1)	June 30, 2020
(2)	December 31, 2020
(3)	June 30, 2021
(4)	December 31, 2021

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List of Accounts

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(b)

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Your answer is partially correct.

Show the proper balance sheet presentation for the liability for bonds payable on the December 31, 2021, balance sheet. (Round answers to 0 decimal places, e.g. 38,548.)

Pronghorn Company Balance Sheet December 31, 2021For the Year Ended December 31, 2021For the Quarter Ended December 31, 2021
Current AssetsCurrent LiabilitiesIntangible AssetsLong-term InvestmentsLong-term LiabilitiesProperty, Plant and EquipmentStockholders' EquityTotal AssetsTotal Current AssetsTotal Current LiabilitiesTotal Intangible AssetsTotal LiabilitiesTotal Liabilities and Stockholders' EquityTotal Long-term InvestmentsTotal Long-term LiabilitiesTotal Property, Plant and EquipmentTotal Stockholders' Equity
			$
Book Value of Bonds PayableNotes PayableCashBad Debt ExpenseLoss on Redemption of BondsPremium on Bonds PayableInterest PayableInterest ExpenseNotes ReceivableDiscount on Notes Payable			$