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On January 1, 2025, Bridgeport Company issued $1,300,000 face value, 7%,10-year bonds at $1,395,681. This...

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Accounting

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On January 1, 2025, Bridgeport Company issued $1,300,000 face value, 7%,10-year bonds at $1,395,681. This price resulted in a 6% effective-interest rate on the bonds. Bridgeport uses the effective-interest method to amortize bond premium or discount. The bonds pay annual interest on each January 1. (a) Your answer is correct. Prepare the journal entries to record the following transactions. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal places, e.s. 125.) 1. The issuance of the bonds on January 1,2025. 2. Accrual of interest and amortization of the premium on December 31,2025. 3. The payment of interest on January 1,2026. 4. Accrual of interest and amortization of the premium on December 31, 2026. Show the proper long-term liabilities balance sheet presentation for the liability for bonds payable at December 31,2026. (Round answers to 0 decimal places, e.g. 125.)

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