Yung Corporation sold $2,000,000, 7%

Yung Corporation sold $2,000,000, 7%, 5 year bonds on January 1, 2014. The bonds were dated January 1, 2014, and pay interest on January 1. The company uses straight-line amortization on bond premiums or discounts.

Instructions

(a) Prepare all necessary journal entries to record the issuance of the bonds and bond interest expense for 2014, assuming the bond sold at 102.

(b) Prepare journal entries as in part (a) assuming the bonds sold at 97.

(c ) Show the balance sheet presentation for the bond issue at December 31, 2014, using (1) the 102 selling price, and then (2) the 97 selling price NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a "?".

(a) Jan 1 Cash 2,040,000

Premium on Bonds Payable 40,000

Bonds Payable 2,000,000

Dec 31 Interest Expense 132,000

Premium on Bonds Payable 8,000

Interest Payable 140,000

(b) Jan 1 Account Value

Account Value

Account Value

Dec 31 Account Value

Account Value

Account Value

(c ) Premium

Current Liabilities

Interest Payable Value

Long-term Liabilities

Bonds payable, due 2019 Value

Add: Premium on bonds payable Value Value

Discount

Current Liabilities

Interest Payable Value

Long-term Liabilities

Bonds payable, due 2019 Value

Less: Discount on bonds payable Value Value