Marini Corporation sold $2,600,000, 9%, 20-year bonds on December 31, 2011. The bonds were dated December 31,

Question:

Marini Corporation sold $2,600,000, 9%, 20-year bonds on December 31, 2011. The bonds were dated December 31, 2011, and pay interest on December 31. The company uses straight-line amortization for premiums and discounts. Financial statements are prepared annually.

Instructions

(a) Prepare the journal entry to record the issuance of the bonds assuming they sold at:

(1) 98.

(2) 104.

(b) Prepare amortization tables for both of the assumed sales for the first three interest payments.

(c) Prepare the journal entries to record interest expense for the first two interest payments under both of the bond issuances assumed in part (a).

(d) Show the long-term liabilities balance sheet presentation for both of the bond issuances assumed in part (a) at December 31, 2012.

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