Rosewell Corporation sold $$4,000,000,7\%,10-$year bonds on January $1,2015.$ The bonds were dated January $1,2015,$ and pay interest annually on January $1.$ Rosewell Corporation uses the straight$-$line method to amortize bond premium or discount.

Instructions

$($a$)$ Prepare all the necessary journal entries to record the issuance of the bonds X assuming that the bonds sold at $103.$

$($b$)$ Prepare journal entries for the interest accrual and amortization of the premium for $2015$ and $2016.$

$($c$)$ Show the balance sheet presentation for the bond liability at December $31,2016.$

$($d$)$ Calculate the total cost of borrowing for this bond.