Norris Corporation issued $2,000,000 in 10.5 percent, 10-year bonds on February 1, 2014, at 104. Semiannual interest

Question:

Norris issued $2,000,000 in 10.5 percent, 10-year bonds on February 1, 2014, at 104. Semiannual interest payment dates are January 31 and July 31. Use the straight-line method and ignore year-end accruals.
1. With regard to the bond issue on February 1, 2014:
a. How much cash is received?
b. How much is Bonds Payable?
c. What is the difference between a and b called and how much is it?
2. With regard to the bond interest payment on July 31, 2014:
a. How much cash is paid in interest?
b. How much is the amortization?
c. How much is interest expense?
3. With regard to the bond interest payment on January 31, 2015:
a. How much cash is paid in interest?
b. How much is the amortization?
c. How much is interest expense?

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...