Wu Ltd. sold ¥6,000,000, 8%, 20-year bonds on January 1, 2017. The bonds were dated January 1 and pay interest annually on January 1. Wu uses the straight-line method to amortize bond premium or discount. The bonds were sold at 96.
Instructions
(a) Prepare the journal entry to record the issuance of the bonds on January 1, 2017.
(b) Prepare a bond discount amortization schedule for the fi rst 4 interest periods.
(c) Prepare the journal entries for interest and the amortization of the discount in 2017 and 2018.
(d) Show the statement of fi nancial position presentation of the bond liability at December 31, 2018.