Doyle Company issued $307,000 of 10-year, 7 percent bonds on January 1, Year 1. The bonds were issued at face value. Interest is payable in cash on December 31 of each year. Doyle immediately invested the proceeds from the bond issue in land. The land was leased for an annual $75,000 of cash revenue, which was collected on December 31 of each year, beginning December 31, Year 1. a. Prepare the journal entries for these events, and post them to T-accounts for Year 1 and Year 2. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
1. Record the issue of bonds payable.
2. Record the purchase of land
3. Record the receipt of lease revenue.
4. Record the interest expenses for bonds payable.
5. Record the entry to close revenue and expense accounts.
6. Record the receipt of lease revenue.
7. Record the interest expenses for bonds payable.
8. Record the entry to close revenue and expense accounts.
b. Prepare the income statement, balance sheet, and statement of cash flows for Year 1 and Year 2. (Amounts to be deducted and net loss amount should be indicated with minus sign.)