On January 1, 2012, Mason Company issues $2 million of 5-year, 7% bonds at 98, with interest payable on June 30 and December 31. Mason uses the straight-line method of amortization.
Required
a. Prepare the journal entry to record the issuance of these bonds.
b. Prepare the journal entry to record interest expense and bond discount amortization on June 30, 2012.
c. Where will the issuance of the bond be reported on Mason's 2012 statement of cash flows?