Chapter 10, Problem 10.14E

(a)

To determine

Bonds

Bonds are a kind of interest bearing notes payable, usually issued by companies, universities and governmental organizations. It is a debt instrument used for the purpose of raising fund of the corporations or governmental agencies. If selling price of the bond is equal to its face value, it is called as par on bond. If selling price of the bond is lesser than the face value, it is known as discount on bond. If selling price of the bond is greater than the face value, it is known as premium on bond.

To prepare: The journal entry to record the sale of these bonds of Company A as on January 1, 2017.

(b)

To determine

To prepare: The balance sheet presentation as on 31^st December 2020 for Company A.

(c)

To determine

To explain: The bonds sold at a price more than the face value amount.