Berol corporation sold 20 year bonds on January 12010. The face value of the bonds was 100000 dollars and they carry a 9% stated rate of interest which is
paid on December 31 of every year. Berol received 91526 dollars in return for the issuance of the bonds when the market rate was 10%. Any premium or discount
is amortized using the effective interest Method.
1. Prepare the journal entry to record the sale of the bonds on jan 12010 and the proper balance sheet presentation on this date.
2. Prepare the journal entry to record interest expense on December 312010 and the proper balance sheet presentation on this date.
Thanks!