When market interest rates were 6%, three companies issued bonds on January 1, 2021. Each company has a December 31 year end and each company issued bonds with a face value of $100,000 that pay interest annually on December 31. Able Limited sold its bonds at 100 and offered a coupon interest rate of 6%, while Beta Corp. sold its bonds at 94 and offered a coupon interest rate of 4%, and Charles Inc. sold its bonds at 105 and offered a 7% coupon interest rate. Instructions

Record the issue of the bonds by each company on January 1, 2021. Prepare the entry that each company would record for the payment of interest on December 31, 2021. Explain why some of the companies are not recording an interest expense on the bonds that is equal to the interest that was actually paid. Determine the balance in each companys Bonds Payable account on December 31, 2021.

Prepare an amortization schedule; record and present bond transactions.