San Diego Company sold \(\$ 1,500,000,12 \%, 10\)-year bonds on July 1, 1996. The bonds were dated July 1, 1996, and pay interest July 1 and January 1. San Diego Company uses the straight-line method to amortize bond premium or discount. Assume no interest is accrued on June 30.

\section*{Instructions}

(a) Prepare all the necessary journal entries to record the issuance of the bonds and bond interest expense for 1996, assuming that the bonds sold at 102 .

(b) Prepare journal entries as in part

(a) assuming that the bonds sold at 94.

(c) Show balance sheet presentation for each bond issue at December 31, 1996.