Question: Sikes Corporation whose annual accounting period ends on December 31

Sikes Corporation, whose annual accounting period ends on December 31, issued the following bonds:
Date of bonds: January 1, 2015
Maturity amount and date: $ 200,000 due in 10 years (December 31, 2024)
Interest: 10 percent per year payable each December 31
Date issued: January 1, 2015
1. For each of the three independent cases that follow, provide the amounts to be reported on the January 1, 2015, financial statements immediately after the bonds are issued:
2. Assume that a retired person has written to you (an investment adviser) asking, “Why should I buy a bond at a premium when I can find one at a discount? Isn’t that stupid? It’s like paying list price for a car instead of negotiating a discount.” Write a brief message in response to the question.

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  • CreatedNovember 02, 2015
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