On May 1, 2020 Crop Corporation issued $425,000 worth of 2% bonds due in 5 years. Interest is paid semi-annually on November 1 and May 1 of each year, and Crop Corporation's year end is December 31. On the issuance date, the market rate of interest was 3%, resulting in a price of $405,417 for these bonds. Note: The premium/discount is amortized using the straight-line method.

b) Prepare the journal entry on November 1, 2020, to record the first interest payment assuming the straight-line method for amortization of bond discount/premium is used.

c) Prepare the adjusting entry on December 31, 2020 assuming the straight-line method for amortization of bond discount/premium is used.

d) Show the balance sheet presentation of long-term liabilities only as at December 31, 2020.

Date Account Title and Explanation Debit Credit Nov 1 Interest Expense x Cash X Discount on Bonds Payable X Payment of interest and amortization Date Account Title and Explanation Debit Credit Dec 31 Interest Expense Discount on Bonds Payable - Interest Payable Accrual of interest on bonds Bonds Payable, 2%, Due May 1, 2023 $ 425000 Add premium or subtract discount $ Total Long-Term Liabilities $