Wainwright Electric sold $3,000,000, 10%, 10-year bonds on March 1, 2015. The bonds were dated January 1 and pay interest September 1 and March 1. Wainwright Electric uses the straight-line method to amortize bond premium or discount. The bonds were sold at 104. The companys year ends on December 31.

Instructions

(a) Prepare the journal entry to record the issuance of the bonds on March 1, 2015.

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

(c) Prepare the journal entries for interest and the amortization of the premium in 2015 and 2016.

(d) Show the balance sheet presentation of the bond liability at December 31, 2016.