Financial Accounting: P10-9A Kinzie Co. sold $3,000,000, 9%, 5-year bonds on January 1, 2010

Financial Accounting

P10-9A
Kinzie Co. sold $3,000,000, 9%, 5-year bonds on January 1, 2010. The bonds were dated January 1, 2010, and pay interest on January 1. The company uses straight-line amortization on bond premiums and discounts. Financial statements are prepared annually.
Instructions
(a) Prepare the journal entries to record the issuance of the bonds assuming they sold at:
(1) issued at 101.
(2) issued at 97.
(b) Prepare amortization tables for both assumed sales for the first three interest payments.
(c) Prepare the journal entries to record interest expense for 2010 under both assumed sales.
(d) Show the balance sheet presentation for both assumed sales at December 31, 2010.
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