Lorance Corporation issued $800,000, 9%, 10-year bonds on January 1, 2015, for $

Question

Lorance Corporation issued $800,000, 9%, 10-year bonds on January 1, 2015, for $750,150. This price resulted in an effective-interest rate of 10% on the bonds. Interest is payable semiannually on July 1 and January 1. Lorance uses the effective-interest method to amortize bond premium or discount. Instructions Prepare the journal entries to record the following. (Round to the nearest dollar.) (a) The issuance of the bonds. (b) The payment of interest and the discount amortization on July 1, 2015, assuming that interest was not accrued on June 30.

Explanation / Answer

a

Issuance of Bond

b

DR CR Cash 750150 Disocunt on issue of bond 49850 Bond payable 800000

Related Questions

Navigate

• Browse (All)
• Browse L
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.