Question#$03$:

a$)$ Off$-$balance$-$sheet financing is an attempt to borrow monies in such a way to prevent

recording the obligations. Explain the statement with appropriate rationale?

b$)$ On July $1,2016,$ Sugarland Company issued Tk$.2,000,000$ face value of $10\%,10-$year

bonds at a yield of $12\%.$ Sugarland uses the effective interest method to amortize bond

premium or discount. The bonds pay semiannual interest on June $30$ and December $31.$

Required:

i$.$ Prepare the journal entries to record the issuance of the bonds on July $1,2016.$

ii$.$ Prepare the journal entries to record the payment of interest and the amortization

of the discount on December $31,2016$; on June $30,2017$; on December $31,2017.$

iii. What amount of interest expense is reported for $2017?$

iv$.$ Show the proper balance sheet presentation for the liability for bonds payable on

the December $31,2017,$ balance sheet.