X corp issued a $100,000 5 year bond, stated interest rate on bond at 10% on January 1,2010. Interest is paid annually at the end of the year. the market interest rate was 7%.
1. Determine the issuance price of the bond on January 1,2010. Record the entry in the accounting equation.
2. Record entry in accounting equation when bond interest is paid on December 31,2010.
3. Show how bonds would be presented on balance sheet on December 31,2011. Two years from issuance.
4. Show the entry in the accounting equation when the bonds mature in 5 years.