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E10-9 Indicating the Effects of a Premium Bond Issue and Interest Payment on the Financial...

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E10-9 Indicating the Effects of a Premium Bond Issue and Interest Payment on the Financial Statements [LO 10-3] Grocery Corporation received $330,510 for 10.00 percent bonds issued on January 1, 2018 at a market interest rate of 700 percent The bonds had a total face value of $273.000, 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 (B/S) or Income Statement (1/S): (b) the dollar amount by which the account increases, decreases, or does not change when Grocery Corporation issues the bonds, and the direction of change in the account increase, decrease, or no change when Grocery Corporation records the Interest payment on December 31. (a) Financial Statement (b) Issuance (c) Interest Paid Account Bonds Payable Discount on Bonds Payable Interest Expense Premium on Bonds Payable

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