Saberhagen Company sold $3,500,000, 8%, 10-year bonds on January 1, 2020. The bonds were dated January 1, 2020, and pay interest annually on January 1. Saberhagen Company uses the straight-line method to amortize bond premium or discount. (a) Prepare all the necessary journal entries to record the issuance of the bonds and bond interest expense for 2017, assuming that the bonds sold at 104. Amortization $14,000 (b) Prepare journal entries as in part (a) assuming that the bonds sold at 98. Amortization $7,000 (c) Show balance sheet presentation for the bonds at December 31, 2017, for both the requirements in (a) and (b). Premium on bonds payable $3,626,000 D0iscount on bonds payable $3,437,000
Question:
Saberhagen Company sold $3,500,000, 8%, 10-year bonds on January 1, 2020. The bonds were dated January 1, 2020, and pay interest annually on January 1. Saberhagen Company uses the straight-line method to amortize bond premium or discount.
(a) Prepare all the necessary
(b) Prepare journal entries as in part (a) assuming that the bonds sold at 98. Amortization $7,000
(c) Show balance sheet presentation for the bonds at December 31, 2017, for both the requirements in (a) and (b). Premium on bonds payable $3,626,000 D0iscount on bonds payable $3,437,000
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