Question: Saberhagen Company sold 3 500 000 8 10 year bonds on July 1

Saberhagen Company sold $3,500,000, 8%, 10-year bonds on July 1, 2014. The bonds were dated July 1, 2014, and pay interest July 1 and January 1. Saberhagen Company uses the straight-line method to amortize bond premium or discount. Assume no interest is accrued on June 30.

(a) Prepare all the necessary journal entries to record the issuance of the bonds and bond interest expense for 2014, assuming that the bonds sold at 104.
(b) Prepare journal entries as in part (a) assuming that the bonds sold at 98.
(c) Show balance sheet presentation for the bonds at December 31, 2014.

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  • CreatedJanuary 30, 2014
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