Part B

On January 1, 2017, Swifty Company issued $2,010,000 face value, 9%, 10-year bonds at $2,144,872. This price resulted in a 8% effective interest rate on the bonds. Swifty uses the effective-interest method to amortize bond premium or discount. The bonds pay annual interest on each January 1. (a) Your answer is correct. Prepare the journal entries to record the following transactions. (Round answers to o decimal places, e.g. 125. Credit account titles are automatically indented when amount is entered. Do not indent manually.) 1. The issuance of the bonds on January 1, 2017 2. Accrual of interest and amortization of the premium on December 31, 2017. 3. The payment of interest on January 1, 2018. 4. Accrual of interest and amortization of the premium on December 31, 2018. No. Date Debit Credit Account Titles and Explanation Cash Jan. 1, 2017 1. 2144872 Bonds Payable 2010000 Premium on Bonds Payable 134872 1> 2. Dec. 31, 2017 Interest Expense 171590 Premium on Bonds Payable 9310 Interest Payable 180900 3. Jan. 1, 2018 Interest Payable 180900 Cash 180900 4. Dec. 31, 2018 Interest Expense 170846 Premium on Bonds Payable 10054 Interest Payable 180900 Show the proper long-term liabilities balance sheet presentation for the liability for bonds payable at December 31, 2018. (Round answers to o decimal places, e.g. 125.) SWIFTY COMPANY Balance Sheet (Partial) December 31, 2018 Long-term Liabilities Bonds Payable 2,010,000 Add 10054 2020054 Premium on Bonds Payable