Question 2 Vadercat Limited issued $30 million 4.5 percent, 15 year bonds on September 1, 2020. The market rate of interest on the date of the issue was 4 percent. Interest is payable semi-annually on March 1 and September 1. The companys year-end is December 31. Required:

a. Prepare all journal entries required to record the bonds in the companys financial records for the first full year the bonds are outstanding. The company uses the straight-line method of amortizations.

b. Indicate how the bond obligation would be shown on the companys year-end statement of financial position.

c. How much interest expense, related to this security, is shown on the 2020 year end income statement?

d. How much interest expense, related to this security, will be shown on the 2021 year end income statement?