On March 1, 201X, Leffer Corporation issued $280,000 of 12%, 5-year bonds for $301,650, yielding a market

Question:

On March 1, 201X, Leffer Corporation issued $280,000 of 12%, 5-year bonds for $301,650, yielding a market rate of 10%. Interest is paid on September 1 and March 1. Leffer Corporation uses the interest method to amortize the premium.

1. Prepare an amortization schedule for the first three semiannual periods.

2. Prepare journal entries to record the following:

a. Bond issue on March 1.

b. Semiannual interest payment and amortization of premium on September 1.

c. The year-end adjusting entry to record expense and premium amortization.

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...