Question: Whitten Company was started when it issued bonds with $300,000 face value on January 1, 2016. The bonds were issued for cash at 103. Whitten

Whitten Company was started when it issued bonds with $300,000 face value on January 1, 2016. The bonds were issued for cash at 103. Whitten uses the straight-line method of amortization. They had a 15-year term to maturity and a 6 percent annual interest rate. Interest was payable annually. Whitten immediately purchased land with the proceeds (cash received) from the bond issue. Whitten leased the land for $36,000 cash per year. On January 1, 2019, the company sold the land for $310,000 cash. Immediately after the sale, Whitten repurchased its bonds (repaid the bond liability) at 104. Assume that no other accounting events occurred in 2019.

Required

Prepare an income statement, statement of changes in equity, balance sheet, and statement of cash flows for each of the 2016, 2017, 2018, and 2019 accounting periods. Assume that the company closes its books on December 31 of each year. Prepare the statements using a vertical statements format.

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Transactions 1 Issued bonds at 103 Cash proceeds 309000 Premium 9000 1116 2 Purchased land for 309000 1116 3 Land rental 36000 per year 2016 2017 2018 ... View full answer

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