Marvin Corp.issued $500,000 of 8%,10 year bonds for 98 on January 1,2016.Interest is payable annually on December 31.
Required: Assuming that Marvin uses the straight-line method for amortization of premium or discount on bonds payable,
a)Prepare the journal entry to record the issuance of the bond.
b)Prepare the required journal entry on December 31,2016.
c)Prepare the liabilities section of the December 31,2016 balance sheet.
d)What amount of interest expense will be shown on the 2016 income statement?
e)Prepare the operating activities section of the 2016 statement of cash flows.

Question

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The Answer of Marvin Corp.issued $500,000 of 8%,10 year bonds for 98 on January 1,2016.Interest is payable annually on December 31.
Required: Assuming that Marvin uses the straight-line method for amortization of premium or discount on bonds payable,
a)Prepare the journal entry to record the issuance of the bond.
b)Prepare the required journal entry on December 31,2016.
c)Prepare the liabilities section of the December 31,2016 balance sheet.
d)What amount of interest expense will be shown on the 2016 income statement?
e)Prepare the operating activities section of the 2016 statement of cash flows.