Prepare entries to record issuance of bonds, interest accrual, and straight-line amortization for 2 years.

(LO 5, 6)

Paris Electric sold $3,000,000, 10%, 10-year bonds on January 1, 2019. The bonds were dated January 1 and pay interest annually on January 1. Paris Electric uses the straight-line method to amortize bond premium or discount. The bonds were sold at 104.

Instructions

(a)

Prepare the journal entry to record the issuance of the bonds on January 1, 2019.

(b)

Prepare a bond premium amortization schedule for the first 4 interest periods.

Amortization $12,000

(c)

Prepare the journal entries for interest and the amortization of the premium in 2019 and 2020.

(d)

Show the balance sheet presentation of the bond liability at December 31, 2020.

Premium on bonds payable $96,000

P10-9A Prepare entries to record issuance of bonds, interest accrual, and straight-line amortization for 2 years (L02.6) Paris Electric sold $3,000,000 10% 10-vear bonds on January 1, 2019. The bonds were dated Januarv 1 and pay interest annually on January 1 Paris Electric uses the straight line method to amortize bond premium or discount. The bonds were sold at 104 Instructions (a) Prepare the journal entry to record the issuance of the bonds on January 1. 2019 (b) Prepare a bond premium amortization schedule for the first 4 interest periods Amortization $12,000 (c) Prepare the journal entries for interest and the amortization of the premium in 2019 and 2020 (d) Show the balance sheet presentation of the bond liability at December 31, 2020 Premium on bonds payable S96,000