Shonrock Co. sold R$800,000, 9%, 10-year bonds on January 1, 2017. The bonds were dated January 1, 2017, and paid interest on January 1. The bonds were sold at 105.
Instructions
(a) Prepare the journal entry to record the issuance of the bonds on January 1, 2017.
(b) At December 31, 2017, the amount of amortized bond premium is R$4,000. Show the statement of financial position presentation of the bond liability at December 31, 2017.
(c) On January 1, 2019, when the carrying value of the bonds was R$832,000, the company redeemed the bonds at 106. Record the redemption of the bonds, assuming that interest for the period has already been paid.