Question 2 (of 4) value: 25.00 points PB10-4 Comparing Bonds Issued at Par, Disc

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Question 2 (of 4) value: 25.00 points PB10-4 Comparing Bonds Issued at Par, Discount, and Premium [LO 10-3] Marshalls Corporation completed a $540,000, 8 percent bond issue on January 1, 2015. The bonds pay interest each December 31 and mature 10 years from January 1, 2015. Required For each of the three independent cases that follow, Provide the following amounts to be reported on the January 1, 2015, financial statements immediately after the bonds were issued: Case A (issued at 100) Case B (at 97) Case C at 103) January 1, 2015-Financial statements a. Bonds Payable b. Unamortized Premium (or discount) c. Carrying Value References eBook & Resources Worksheet Difficulty: 2 Medium

Explanation / Answer

January 1, 2015 --Financial Statement Case A Case B Case C (Issued at 100) (at 97) (At 103) a. Bonds Payable $         5,40,000 $        5,40,000 $      5,40,000 b. Unamortized Premium (or discount) 0 $           16,200 $ 16,200 c. Carrying Value $         5,40,000 $        5,23,800 $      5,56,200 Bonds are issued at 100 means bonds issued at 100% of face value. Similarly, 97 and 103 means bonds are issued at 97% and 103% of face value.

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