On May 1, 2020 Trivial Corporation issued $424,000 worth of 6% bonds due in 6 years. Interest is paid semi-annually on November 1 and May 1 of each year, and Trivial Corporation's year end is December 31. On the issuance date, the market rate of interest was 5%, resulting in a price of $445,766 for these bonds. Note: The premium/discount is amortized using the straight-line method.

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a) Is this bond issued at a discount or at a premium? Premium

Prepare the journal entry on May 1, 2020, to issue the bonds.

a) Is this bond issued at a discount or at a premium?: Premium Prepare the journal entry on May 1, 2020, to issue the bonds. Date Account Title and Explanation Debit Credit May 1 Cash Bonds Payable Issuance of bonds 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. Date Account Title and Explanation Debit Credit Nov 1 Payment of interest and amortization c) Prepare the adjusting entry on December 31, 2020 assuming the straight-line method for amortization of bond discount/premium is used. Date Account Title and Explanation Debit Credit Dec 31 Accrual of interest on bonds d) Show the balance sheet presentation of long-term liabilities only as at December 31, 2020. Bonds Payable, 6%, Due May 1, 2026 $ Add premium or subtract discount $ Total Long-Term Liabilities $