On September 30, 2016, Golf Mania, Inc., issued $3 million face-value debentures. The bonds have a nominal interest rate of 10% per annum, payable semi-annually on 31 March and 30 September, and mature in 10 years, on September 30, 2026. The bonds were issued at a price to yield 8%. Golf Manias fiscal year ends on December 31. REQUIRED:

1. Determine the price at which the bonds were issued.

2. Present all journal entries to be prepared, in proper format, to record the issue of the bonds.

3. Present all journal entries required to be prepared, in proper format, on December 31, 2016.

4. Present all journal entries required to be prepared, in proper format, on March 31, 2017.

5. How will the bonds be reported on the Balance Sheet dated December 31, 2017.

6. Now zoom forward to September 30, 2026. Present all journal entries required to be prepared, in proper format, on September 30, 2026.

7. Now ignore the transaction stated in [6] above. Assume instead that on December 1, 2019, debentures with a face value of $750,000 were called in and redeemed at 112. Present all journal entries required to be prepared, in proper format, on December 1, 2019 to record this redemption of the above stated bonds.

8. For this question only, assume the bonds issued on September 30, 2016, were being amortized using the straight line method. Use the bond issue price as calculated by you in [1] above to record the interest paid on September 30, 2019.