Question: CHAPTER 9 LECTURE EXAMPLE 4 Gonzalez Corporation issued $400,000, 7%, 20-year bonds on January 1, 2016, for $360,727. This price resulted in an effective interest

CHAPTER 9 LECTURE EXAMPLE 4 Gonzalez Corporation issued $400,000, 7%, 20-year bonds on January 1, 2016, for $360,727. This price resulted in an effective interest rate of 8% on the bonds. Interest is payable annually on January 1. Gonzalez uses the effective interest method to amortize bond premiums and discounts. Prepare the journal entries to record: 1. The issuance of the bonds 2. The accrual of interest and the premium or discount amortization on December 31, 2016. 3 The payment of interest on January 1, 2017. Also, what amounts would be shown on the December 31, 2016 financial statements

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