PT Wibawa Mukti received proceeds of USD319,500 on 10-year, 6% bonds issued on January 1, 2020.The bonds had a face value of USD300,000, pay interest annually on January 1, and have a call price of 110. Brooks uses the straight-line method of amortization.

Question 1

a.Determine the journal entrythat should be prepared by PT Wibawa Mukti through the year of 2020 and on 1 Januari 2021.

b.Determine the amount of the following accounts to be reported in the financial statement of 2020:

a.Bonds Payable

b.Interest Expense

Question 2

Brooks Company decided to redeem the bonds on January 1, 2022. You are asked to:

a.Prepare the journal entry for bond redemption on January 1, 2022.

b.Determine amount of gain or loss would Brooks report on its 2020 income statement?