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On January 1, 2019 Lightfoot Corporation issues 10%, 5-yearbonds with a face value of...

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Accounting

On January 1, 2019 Lightfoot Corporation issues 10%, 5-yearbonds with a face value of $275,000 when the effective interestrate is 9%. Interest is to be paid semiannually on June 30 andDecember 31. Lightfoot uses the effective interest method toamortize the premium on June 30, 2019.

Prepare the journal entry to record the first interest paymenton June 30, 2019.

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4.1 Ratings (644 Votes)
Semi Annual interest payment 275000 x 10 x 612 13750 Present value of principal to be received at the maturity Par value of bonds x Present value factor r n 275000 x Present value factor 45 10 275000 x 064393 17708075 Present    See Answer
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Transcribed Image Text

In: AccountingOn January 1, 2019 Lightfoot Corporation issues 10%, 5-yearbonds with a face value of $275,000...On January 1, 2019 Lightfoot Corporation issues 10%, 5-yearbonds with a face value of $275,000 when the effective interestrate is 9%. Interest is to be paid semiannually on June 30 andDecember 31. Lightfoot uses the effective interest method toamortize the premium on June 30, 2019.Prepare the journal entry to record the first interest paymenton June 30, 2019.

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