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Net Work Corporation, whose annual accounting period ends on December 31, issued the following bonds. Date of bonds: January
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Answer #1
Bonds payable amount would be reported as follows in the financial statement
Case A: If issued at 100
This mean bond are issued at par and thus there would be no discount or premium on bonds payable
Bonds payable $410,000
Unamortized premium (discount) $0
Carrying value $410,000
Case B: If issued at 98
This mean bond are issued at discount and thus there would be unamortized discount
Bonds payable $410,000
Unamortized premium (discount) -$8,200 410000*2%
Carrying value $401,800
Case C: If issued at 102
This mean bond are issued at premium and thus there would be unamortized premium
Bonds payable $410,000
Unamortized premium (discount) $8,200 410000*2%
Carrying value $418,200
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