Rosewell Ltd. sold £4,000,000, 7%, 10-year bonds on January 1, 2017. The bonds were dated January 1, 2017, and pay interest annually on January 1. Rosewell uses the straight-line method to amortize bond premium or discount.
Instructions
(a) Prepare all the necessary journal entries to record the issuance of the bonds and bond interest expense for 2017, assuming that the bonds sold at 103.
(b) Prepare journal entries as in part (a), assuming that the bonds sold at 96.
(c) Show the statement of fi nancial position presentation for the bond liability at December 31, 2017, for both parts (a) and (b).