Elkins company sold $2,500,000, 85, 10-year bonds on July 1,2011. The bonds were dated July 1,2011, and pay interest July1 and January 1. Elkins Company uses the straight -line method to amoritize bond premium or discount. Assume no interest is accured on June 30.

1. Prepare all the necessary journal entries to record the issuarance of the bonds and bond expense for 2011.
2. Prepare journal entries as in the previous part of the question assuming that the bonds sold at 98.
3. Show balance sheet presentation for each bond issue at December 31, 2011.

Elkins Company sold $2,500,000, 8%, 10-year bonds on July 1, 2011. The bonds were dated July 1, 2011, and pay interest July 1 and January 1. Elkins Company uses the straight-line method to amortize bond premium or discount. Assume no interest is accrued on June 30.

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