Wainwright Electric sold $2,278,000, 10%, 10-year bonds on January 1, 2014. The bonds were dated January 1 and pay interest July 1 and January 1. Wainwright Electric uses the straight-line method to amortize bond premium or discount. The bonds were sold at 105. Assume no interest is accrued on June 30.
1. Prepare the journal entry to record the issuance of the bonds on January 1, 2014. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
2. Prepare a bond premium amortization schedule for the first 4 interest periods.
3. Prepare the journal entries for interest and the amortization of the premium in 2014 and 2015. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
4. Show the balance sheet presentation of the bond liability at December 31, 2015. (For Bonds Payable, Notes Payable and Mortgage payable enter the account name only and do not provide any additional descriptive information e.g. due 2024.)