Question

On June 30, 2020, Kingbird Company issued $3,120,000 face value of 15%, 20-year bonds at $3,824,160, a yield of 12%. Kingbird uses the effective-interest method to amortize bond premium or discount. The bonds pay semiannual interest on June 30 and December 31.

Show the proper balance sheet presentation for the liability for bonds payable on the December 31, 2021, balance sheet. (Round answers to o decimal places, e.g. 38,548.) Kingbird Company Balance Sheet

Fill the blank and select on of the options below for each number.

1)

A) December 31, 2021

B) For the year ended December 31, 2021

C) For the Quarter ended December 31, 2021

2)

A) current assets B) current liabilities C) Intangible assets D) Long-term investments E) Long term liabilities F) Property, Plant and Equipment G) Stockholder's equity H) Total Assets I) Total current Assets J) Total current liabilities K) Total intangible Assets L) Total liabilities M) total liabilities and stockholder's equity N) Total long term investments O) total long-term liabilities P) total plant, property and equipment Q) total stock holder's equity.

3)

A) Notes payable B) cash C) premuim on bonds payable D) Discount on notes payable E) interest payable F) Notes receivable G) bad debit expense H) book value bonds payable I) loss on redemption on bonds J) interest expense

Answer 1

Date	Cash payment	Interest Expense	Premium on Bond amortized	Bond Premium	Carrying amount of Bond
June 30-2020				704160	38,24,160
Dec 31 2020	234000	229450	4550	699610	38,19,610
june 30 2021	234000	229177	4823	694786	38,14,786
Dec 31 2021	234000	228887	5113	689673	38,09,673

Cash payment = 3,120,000 *15%/2 =234000

Interest Expense=Carrying value * 12%/2

Bond premium = $3,824,160 - 3,120,000 =$704160

Kingbird Company
Balance sheet
For the year ended December 31, 2021
Long term liabilities
Bond Payable	31,20,000
Premium on Bond	689673
total long-term liabilities		38,09,673