On January 1, 2014, Mendez Corporation Issued 400 of Its

question 11

Essay

On January 1, 2014, Mendez Corporation issued 400 of its $1,000, ten-year, 9% bonds. The bonds were dated January 1, 2014, and interest is paid annually each December 31. The bonds were issued at 99.
Required:
Part A: Prepare the entry to record the issuance of the bonds on January 1, 2014:
Part B: Were the bonds issued at par, at a premium, or at a discount? How did you arrive at your answer?

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Definitions:

Indirect Method

A way of preparing the cash flow statement where net income is adjusted for non-cash transactions, indirect expenses, and changes in working capital.

Depreciation Expense

A technique in accounting that involves spreading out the expense of a physical asset over its expected lifespan.

Depreciation Expense

The allocated cost of an asset over its useful life as an expense in accounting.