*P11-7B Roeder Company sold $4,000,000, 9%, 20-year bonds on January 1, 2008. The bonds

Price: $3.99


*P11-7B Roeder Company sold $4,000,000, 9%, 20-year bonds on January 1, 2008. The bonds
were dated January 1, 2008, and pay interest on January 1 and July 1. Roeder Company uses the
straight-line method to amortize bond premium or discount.The bonds were sold at 96.Assume
no interest is accrued on June 30.

Instructions

(a) Prepare the journal entry to record the issuance of the bonds on January 1, 2008.

(b) Prepare a bond discount amortization schedule for the first 4 interest periods.

(c) Prepare the journal entries for interest and the amortization of the discount in 2008 and
2009.

(d) Show the balance sheet presentation of the bond liability at December 31, 2009.