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Vaughn Ltd. issued a $135,000, 3-year, zero-interest bond dated January 1, 2017. The market interest...

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Accounting

Vaughn Ltd. issued a $135,000, 3-year, zero-interest bond dated January 1, 2017. The market interest rate for similar bonds was 8.25%. Assume the company used the effective interest method of amortization.

1. Prepare the journal entry for the issue of the bond.

2. Prepare a schedule of bond discount/premium amortization. (Round answers to 0 decimal places)

3. Prepare the journal entry at December 31, 2017, assuming the companys year-end was December 31.

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