A.
Bonds: Bonds are long-term promissory notes that are represented by a company while borrowing money from investors to raise fund for financing the operations.
Bonds Payable: Bonds payable are referred to long-term debts of the business, issued to various lenders known as bondholders, generally in multiples of $1,000 per bond, to raise fund for financing the operations.
Premium on bonds payable: It occurs when the bonds are issued at a high price than the face value.
To prepare:
B.
To prepare: Journal entry to record first interest payment and amortization of premium on bonds.
C.
To explain: The reason why the company was able to issue the bonds for $20,811,010 rather than $20,000,000.
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Corporate Financial Accounting
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