On March 1, 2017, Joyce Inc. issued $500,000 of 10% callable bonds due in 4 years at $551,228 which is an effective interest rate of 8%. Interest is payable on March 1 and September 1. Assume that Joyce Inc. uses the effective interest rate method to amortize bond discount and premium. $200,000 of the bonds were purchased back by Joyce Inc. and retired on June 30, 2018 at a price of 104. Part 1 - Record the following transactions: (A) The sale of bonds on March 1, 2017 (B) Interest payment made on September 1, 2017 (C) Adjusting entry required on December 31, 2017 (D) Interest payment made on March 1, 2018 (E) Bonds purchased and retired on June 30, 2018 (F) Interest payment made on September 1, 2018

Part 2 - Complete the following chart for 2017: Balance Sheet as of 12/31/17: Interest Payable Bonds Payable: Plus Premium on Bonds Payable Carrying Value of Bond ?

Cash Flow Statement for 2017: Operating Cash Flows Investing Cash Flows Financing Cash Flows ?

Income Statement for 2017: Interest Expense ?

Part 3 - Assume that each $1,000 bond is convertible into 15 shares of $2 par value common stock and that on June 30, 2018 the $200,000 of bonds were converted into common stock instead by being repurchased by the company. Prepare the journal entry for Joyce Inc. to record the conversion of the bonds into stock on that date. Part 4 - Assume that a single company (Judy Investments) purchased all of the bonds on March 1, 2017. Record the following transactions: (A) The purchase of bonds on March 1, 2017 (B) Receipt of interest on September 1, 2017 (C) Adjusting entry required on December 31, 2017 (D) Receipt of interest on March 1, 2018 (E) Sale of bonds back to company on June 30, 2018 (F) Receipt of interest on September 1, 2018 HINT - While we have not explicitly covered this yet, try to answer Part 4 based on what you already know. For a simpler example, take a look at the early slides in Notes and Bonds where I illustrated the accounting for both Notes Receivables and Notes Payable. All of the amounts will be the same - the only change will be what account titles you use and whether you debit or credit the ac