60.1K

Verified Solution

Link Copied!

Exercise 10-18 Lorance Corporation issued $809,000, 9%, 10-year bonds on January 1, 2015, for $758,590. 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. Prepare the journal entry to record the issuance of the bonds. (Round answers to 0 decimal places, e.g. 15,250. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Jan. 1 SHOW LIST OF ACCOUNTS Prepare the journal entry to record the payment of interest and the discount amortization on July 1, 2015, assuming that interest was not accrued on June 30. (Round answers to 0 decimal places, e.g. 15,250. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit July 1 Prepare the journal entry to record the accrual of interest and the discount amortization on December 31, 2015. (Round answers to o decimal places, e.g. 15,250. Credit account titles are automatically indented -vhen amount is entered. Do not indent manually.) Debit Credit Date Account Titles and Explanation Dec. 31 SHOW LIST OF ACCOUNTS

Answer & Explanation Solved by verified expert

See Answer