Question: On January 1 , 2 0 2 6 , Splash City issues $ 4 0 0 , 0 0 0 of 8 % bonds, due

On January 1,2026, Splash City issues $400,000 of 8% bonds, due in 15 years, with interest payable semiannually on June 30 and December 31 each year. The bonds issue at $400,000.
Required:
1. How will the bond issuance on January 1,2026, affect the financial statements?
2-a. How will the first payment on June 30,2026, affect the financial statements?
2-b. How will the second payment on December 31,2026, affect the financial statements?

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