BONDS ISSUED AT A DISCOUNT Emerald, Inc., issued the following bonds at a discount:

Date of issue and sale: ......April 1, 20-1

Principal amount: ........$500,000

Sale price of bonds: .......97

Denomination of bonds: ......$1,000

Life of bonds: ..........20 years

Stated rate: .........8%, payable semiannually on

..............September 30 and March 31

REQUIRED

1. Prepare journal entries for:

(a) Issuance of the bonds at a discount.

(b) Interest payment and discount amortization on the bonds on September 30, 20-1.

(c) Year-end adjustment on the bonds for 20-1.

(d) Reversing entry for the beginning of 20-2.

(e) Interest payments and discount amortization on the bonds for 20-2 (March

31 and September 30).

2. Calculate the carrying value of the bonds on September 30, 20-2.