Answer:
The balance of the equation at end of year 2 is$388,800
The balance of the equation at end of year 3 is $417,600
Explanation:
Assets =Liabilities +shareholders' equity
Land +cash Bonds payable retained earnings
1/1/year 2 $360,000 =$360,000
1/1/year 2 $360,000 ($360,000)
31/12/year2 $53,500 = $53,500
31/12/year2 ($28,800) = ($28,800)
Balance $388,800 = $388,800
Opening balance $388,800= $388,800
31/12/year3 $53,500= $53,500
31/12/year3 ($28,800)= ($28,800)
Balance $ 417,600 $417,600
The interest on bond=$360,000*8%=$28,800
