Problem
Analyzing and Reporting Financial Statement Effects of Bond Transactions
On January 1, 2012, Trueman Corporation issued $800,000 of 20-year, 11% bonds for $739,813, yielding a market (yield) rate of 12%. Interest is payable semiannually on June 30 and December 31.
(a) Confirm the bond issue price.
(b) Describe the financial statement effects for bond issuance, indicating the financial statement items affected and the related amounts.
(c) Describe the financial statement effects for semiannual interest payment and discount amortization on June 30.