158.Glover Corporation issued $2,000,000 of 7.5%, 6-year bonds dated March 1, with semiannual interest payments on September 1 and March 1. The bonds were issued on March 1, at 97. Glover’s year­end...

158.Glover Corporation issued $2,000,000 of 7.5%, 6-year bonds dated March 1, with semiannual interest payments on

September 1 and March 1. The bonds were issued on March 1, at 97. Glover’s year­end is December 31.

a)Were the bonds issued at a premium, a discount, or at par?

b)Was the market rate of interest higher, lower, or the same as the contract rate of interest?

c)If the company uses the straight-line method of amortization, what is the amount of interest expense

GloverCorporation will show for the year ended December 31?

d)What is the carrying value of the bonds on December 31?

159.On January 1, Yeargan Company obtained a $125,000, 7-year 5% installment note from Farmers Bank. The noterequires annual payments of $21,602, with the first payment occurring on the last day of the fiscal year. The firstpayment consists of $6,250 interest and principal repayment of $15,352.

Requirement:

(1)Journalize the following entries:

a.Issued the installment notes for cash on January 1.

b.Paid the first annual payment on the note.

160.On January 1, Luther Co. issued a $1,000,000, 5 year, 8% installment note payable with payments of $200,000principal plus interest due on January 1 of each year for the next 5 years.

1.Prepare the adjusting journal entry at December 31 to accrue interest for the year.

2.Show the account(s) and amount(s) and where it will appear on a multi-step income statement prepared onDecember 31.

3.Show the account(s) and amount(s) and where they will appear on a classified balance sheet prepared onDecember 31.