1. Journalize the following transactions of Lamore Communications, Inc.:
2010
Jan 1 Issued $4,000,000 of 7%, 10-year bonds payable at 96.
Jul 1 Paid semiannual interest and amortized the bonds by the straight-line method on the 7% bonds payable.
Dec 31 Accrued semiannual interest expense and amortized the bonds by the straight-line method on the 7% bonds payable.
2011
Jan 1 Paid semiannual interest.
2020
Jan 1 Paid the 7% bonds at maturity.
2. At December 31, 2010, after all year-end adjustments, determine the carrying amount of Lamore Communications bonds payable, net.
3. For the six months ended July 1, 2010, determine the following for Lamore
Communications Inc:
a. Interest expense
b. Cash interest paid
What causes interest expense on the bonds to exceed cash interest paid?