QUESTION
Grocery Corporation received $\$ 330,839$ for 9.00 percent bonds issued on January 1,2018 , at a market interest rate of 6.00 percent. The bonds had a total face value of $\$ 271,000$, stated that interest would be paid each December 31 , and stated that they mature in 10 years. Required: Prepare the following table for each account by indicating $(a)$ whether it is reported on the Balance Sheet $(\mathrm{B} / \mathrm{S})$ or Income Statement (I/S); (b) the dollar amount by which the account increases, decreases, or does not change when Grocery Corporation issues the bonds; and $(c)$ the direction of change in the account [increase, decrease, or no change] when Grocery Corporation records the interest payment on December 31. \begin{tabular}{|l|l|l|l|} \hline \multicolumn{1}{|c|}{ Account } & $\begin{array}{c}\text { (a) } \\ \text { Financial } \\ \text { Statement }\end{array}$ & $\begin{array}{c}\text { (b) } \\ \text { Issuance }\end{array}$ & $\begin{array}{c}\text { (c) Interest } \\ \text { Paid }\end{array}$ \\ \hline Bonds Payable & & & \\ \hline $\begin{array}{l}\text { Discount on Bonds } \\ \text { Payable }\end{array}$ & & & \\ \hline Interest Expense & & & \\ \hline $\begin{array}{l}\text { Premium on Bonds } \\ \text { Payable }\end{array}$ & & & \\ \hline \end{tabular}
Public Answer
