Grocery Corporation received $300,328 for 11 percent bonds issued on January 1, 2018, at a market interest rate of 8 percent. The bonds had a total face value of $250,000, stated that interest would be paid each December 31, and stated that they mature in 10 years. eBook
Required: Prepare the following table for each account by indicating (a) whether it is reported on the Balance Sheet (B/S) or Income Statement (1/S); (b) the dollar amount by which the account increases, decreases, or does not change when Grocery Corporation issues the bonds; and (c) the direction of change in the account [increase, decrease, or no change] when Grocery Corporation records the interest payment on December 31.
Account (a) Financial Statement (b) Issuance (c) Interest Paid
Bonds Payable 1/S $300,328
Discount on Bonds Payable B/S
Interest Expense B/S
Premium on Bonds Payable B/S
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Grocery Corporation received $300,328 for 11 percent bonds issued on January 1, 2018, at a market in...
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