Question: Sunset Company issues $2,000,000 face value, 5%, 5-year bonds payable on December 31, 20X1. Interest is paid semiannually each June 30 & December 31. The

Sunset Company issues $2,000,000 face value, 5%, 5-year bonds payable on December 31, 20X1. Interest is paid semiannually each June 30 & December 31. The bonds sell at a price of 96; Sunset uses the straight-line method of amortizing bond discount/premium. 1. Record the entry made by Sunset Co. to record issuance of the bonds payable. 2. What is the carrying value of this liability on the December 31, 20X1 balance sheet? 3. Record the first semiannual payment of interest and amortization of discount/premium on the bonds at June 30, 20X2. 4. What is the carrying value of this liability at June 30, 20X2? 5. What is the carrying value of this liability at maturity? 6. Record the entry if the bonds were retired June 30 20X2 for 98. 7. Record the entry if the bonds were converted for 10,000 shares $100 par common stock on Dec. 31, 20X6 at maturity.

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