Answer:
(A)
cash 3,100,000
bonds payable 3,100,000
(B)
interest expense 155,000
interest payable 155,000
(C)
interest payable 155,000
cash 155,000
Explanation:
(A) the bonds were issued at par value so no discount or premium should be aknowledge
(B) 3,100 bonds x 1,000 face value x 5% interest = 155,000 interest expense
this interest expense is not paid at dec 31th so it is interest payable
(C) write-off the payable and the decrease in cash for the amount paid.
