Reference no: EM132740747
Problem - On July 1, 2016, Sugarland Company issued Tk. 2,000,000 face value of 10%, 10-year bonds at a yield of 12%, Sugarland uses the effective interest method to amortize bond premium or discount. The bonds pay semiannual interest on June 30 and December 31.
Required -
i. Prepare the journal entries to record the issuance of the bonds on July 1, 2016.
ii. Prepare the journal entries to record the payment of interest and the amortization of the discount on December 31, 2016; on June 30, 2017; on December 31, 2017.
iii. What amount of interest expense is reported for 2017?
iv. Show the proper balance sheet presentation for the liability for bonds payable on the December 31, 2017, balance sheet.
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