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Nork $-$ Ch$.10$

Arnold Corporation issued $$600,000$ of $20-$year, $8$ percent bonds on January $1,$ Year $1,$ with interest payable annually on December $31.$ The bonds were issued at their face amount. The fiscal year of the corporation ends December $31.$

Required:

a$.$ Show the effect of the following events on the financial statements by recording the appropriate amounts in a horizontal statements model.

Issued the bonds on January $1,$ Year $1.$

Paid interest due to bondholders on December $31,$ Year $1.$

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Show the effect of the following events on the financial statements by recording the appropriate amounts in a horizontal statements model. $($In the Statement of Cash Flows column, indicate whether the item is an operating activity $($OA$),$ investing activity $($IA$),$ or financing activity $($FA$).$ Leave blank to indicate that an element is not affected by the event. Amounts to be deducted and cash outflows should be indicated with a minus sign.$)$

Issued the bonds on January $1,$ Year $1.$

Paid interest due to bondholders on December $31,$ Year $1.$

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$\backslash$table$[[$Effect of Transactions on Financial Statements$],[$Event No$.,$Balance Sheet,Income Statement,$\backslash$table$[[$Statement of Cash$],[$Flows$]]],[$Assets$,=,$Liabilities,$+,\backslash$table$[[$Stockholders$\text{'}],[$Equity$]],\backslash$table$[[$Revenuel$],[$Gain$]],-,\backslash$table$[[$Expenses$/],[$Loss$]],=,$Net Income$],[1.,,=,,+,,,-,,=,,$T$],[2,,=,,+,,,-,,=,,]]$

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