Cherney Electric sold $500,000, 10%, 10-year bonds on January 1

| September 28, 2018

Cherney Electric sold $500,000, 10%, 10-year bonds on January 1, 2012. The bonds were dated January 1 and paid interest on January 1 and July 1. The bonds were sold at 104.Instructions(a) Prepare the journal entry to by Text-Enhance” id=”_GPLITA_0″ style=”text-decoration:underline” href=”#” in_rurl=””>record the issuance of the bonds on January 1, 2012.(b) At December 31, 2012, the balance in the Premium on Bonds Payable account is $18,000. Show the balance sheet presentation of accrued interest and the bond liability at December 31, 2012.(c) On January 1, 2014, when the carrying value of the bonds was $516,000, the company redeemed the bonds at 105. Record the redemption of the bonds assuming that interest for the period has already been paid.

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