Reporting Financial Statement Effects of Bond Transactions On January 1, 2016, Shields, Inc., issued $600,000 of 9%, 20 -year bonds for $659,379, yielding a market (yield) rate of 8%. Semiannual interest is payable on June 30 and December 31 of each year.

a. Show computations to confirm the bond issue price.

Round answers to the nearest whole number.

Present value of principal repayment
Present value of interest payments
Selling price of bonds

b. Prepare journal entries to record the bond issuance, semiannual interest payment and premium amortization on June 30, 2016, and semiannual interest payment and premium amortization on December 31, 2016. Use the effective interest rate method.

Round answers to the nearest whole number.

General Journal
Date	Description	Debit	Credit
1/1/16	CashBond premiumBonds payableInterest expense
	CashBond premiumBonds payableInterest expense
	Bonds payable
6/30/16	Interest expense
	CashBond premiumBonds payableInterest expense
	CashBond premiumBonds payableInterest expense
12/31/16	Interest expense
	CashBond premiumBonds payableInterest expense
	CashBond premiumBonds payableInterest expense

c. Post the journal entries from part b to their respective T-accounts.

Cash
	Answer	Answer
	Answer	Answer

Bond Premium
	Answer	Answer
	Answer	Answer

Bond Payable
	Answer	Answer

Interest Expense
	Answer	Answer
	Answer	Answer

d. Record each of the transactions from part b in the financial statement effects template.

Use rounded answers from above. When applicable, enter the total amount for liabilities. Use negative signs with answers, when appropriate.

					Balance Sheet													Income Statement
Transaction					Cash Asset		+	Noncash Assets		=	Liabilities		+	Contr. Capital	+	Earned Capital		Revenue	-	Expenses	=	Net income
1/1/16 Issue bonds
6/30/16 Interest payment on bonds
12/31/16 Interest payment on bonds

Please answer all parts of the question.