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Merlin SA started business one year ago and reported the following account balances sheet on 31 December 2019 as followed.      Cash                            100,000  PPE                              500,000  Note payable              120,000  Equity                          480,000       Merlin sold €100,000, five-year, 9% bonds on January 1, 2020, for €103,992.71. Interest is payable each January 1. The Note Payable is due on June 30, 2020, with a 10% interest rate. Show the financial statement impact and prepare the journal entry on December 31, 2020, if bond Discount is amortized using the straigh-line amortization (show your calculation).

Merlin SA started business one year ago and reported the following account balances sheet on 31 December 2019 as followed.      Cash                            100,000  PPE                              500,000  Note payable              120,000  Equity                          480,000       Merlin sold €100,000, five-year, 9% bonds on January 1, 2020, for €103,992.71. Interest is payable each January 1. The Note Payable is due on June 30, 2020, with a 10% interest rate. Show the financial statement impact and prepare the journal entry on December 31, 2020, if bond Discount is amortized using the straigh-line amortization (show your calculation).

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Merlin SA started business one year ago and reported the following account balances sheet on 31 December 2019 as followed.     
Cash                            100,000 
PPE                              500,000 
Note payable              120,000 
Equity                          480,000 
    
Merlin sold €100,000, five-year, 9% bonds on January 1, 2020, for €103,992.71. Interest is payable each January 1. The Note Payable is due on June 30, 2020, with a 10% interest rate. Show the financial statement impact and prepare the journal entry on December 31, 2020, if bond Discount is amortized using the straigh-line amortization (show your calculation).  

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