kierraivey
kierraivey
06.04.2021 • 
Business

Indicating the Effects of a Premium Bond Issue and Interest Payment on the Financial Statements [LO 10-3] Grocery Corporation received $300,411 for 11.50 percent bonds issued on January 1, 2018, at a market interest rate of 8.50 percent. The bonds had a total face value of $251,000, stated that interest would be paid each December 31, and stated that they mature in 10 years. Required: Prepare the following table for each account by indicating (a) whether it is reported on the Balance Sheet (B/S) or Income Statement (I/S); (b) the dollar amount by which the account increases, decreases, or does not change when Grocery Corporation issues the bonds; and (c) the direction of change in the account [increase, decrease, or no change] when Grocery Corporation records the interest payment on December 31.

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