On June 30, 2010, Mako Company issued $50,000 worth of five-year, 10% bonds when the market rate

Question:

On June 30, 2010, Mako Company issued $50,000 worth of five-year, 10% bonds when the market rate was 9%. Proceeds were $51,945. The interest is paid annually on June 30.
1. What is the annual interest payment?
2. What is the amount of interest expense on the date of the first interest payment?
3. How would the bonds payable and the interest expense be shown on the year-end (June 30, 2011)?

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...