Answer:
E-Tech Initiatives Limited
Partial balance sheet
as on January 2, 2019
Liabilities
Long term Liabilities
Bond Payable ________________ $500,000
Add: Premium on Bond _________ <u>$10,000 </u>
_____________________________________ $510,000
Explanation:
First Calculate the issuance value
Issuance value = $500,000 x 102% = $510,000
The bond is issued on Premium, Now calculate the premium on bond value
Premium on bond = Issuance value - Premium on Bond
Premium on bond = $510,000 - $500,000
Premium on bond = $10,000
The bond payable value of $500,000 and Premium on the bond aer reported in the long term liability section of balance sheet.