Question

Doyle Company issued $500,000 of 10-year, 7 percent bonds onJanuary 1, 2016. The bonds were issued at face value. Interest ispayable in cash on December 31st of each year. Doyle immediatelyinvested the proceeds from the bond issue in land. The land wasleased for an annual cash revenue of $125,000 which was collectedon December 31 of every year, beginning 12/31/16.

Required: A) Pepare the journal entries for these events andpost them to T-accounts for 2016 and 2017. B) Prepare the incomestatement, balance sheet,a nd statement of cash flows for 2016 and2017.

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