Pate Company was started when it issued bonds with a $400,000 face value on January 1, 2013. The bonds were issued for cash at 96. They had a 20 year term to maturity and an 8 percent annual interest rate. Interest was payable on December 31 of each year. Pate Company immediately purchased land with the proceeds (cash received) from the bond issue. Pate leased the land for $50,000 cash per year. On January 1, 2016, the company sold the land for $400,000 cash. Immediately after the sale of the land, Pate redeemed the bonds at 98. Assume that no other accounting events occurred during 2016.
Required:
Prepare an income statement, statement of changes in equity, balance sheet, and statement of cash flows for the 2013, 2014, 2015, and 2016 accounting periods. Assume that the company closes its books on December 31 of each year. Prepare the statements using a vertical statements format.