Question 2 (15 marks) On December 31, 2016, Potter Corporation issued $2,000,000, 6%, 5-year bonds...
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Question 2 (15 marks) On December 31, 2016, Potter Corporation issued $2,000,000, 6%, 5-year bonds for $1,837,750 The bonds were sold to yield an effective interest rate of 8%. Interest is paid annually on December 31. The company uses the effective-interest method of amortization. Instructions (a) Prepare the journal entries that Potter Corporation would make on December 31, 2016, and December 31, 2017, and December 31, 2018 related to the bond issue. (b) Prepare a bond discount amortization table for the first 2 interest periods. (c) Show the statement of financial position presentation of the bond liability at December 31, 2018. Question 3 (20 marks he equity section of Ankiel Corporation's statement of financial position at December 31, 201 pears below: Equity Share capital-ordinary, $10 par, 400,000 shares authorized, 250,000 $2,500,00
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