Question: Question 5 Wart Ltd issued $8,000,000 face value, five-year, 10% bonds on August 1, 2015 when the market rate of interest was 12%. Interest

Question 5 Wart Ltd issued $8,000,000 face value, five-year, 10% bonds on

Question 5 Wart Ltd issued $8,000,000 face value, five-year, 10% bonds on August 1, 2015 when the market rate of interest was 12%. Interest payments are due quarterly. Wart has a December 31 year end and has adopted the straight-line method of amortizing any premium or discount that may result from the issuance of various financial instruments. Required: 1. Prepare the journal entry to record the issuance of the bonds. 2. Prepare all journal entries required to record the first full year the bonds are outstanding. 3. Clearly outline how all bond related items would be shown on the yearend Statement of Financial Position of Wart Ltd. 4. What is the interest expense that will be shown on the year end income statement of Wart Ltd?

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