On May 1, 201X, Lexington Corporation issued $180,000 of 10%, 5-year bonds for $194,679, yielding a market

Question:

On May 1, 201X, Lexington Corporation issued $180,000 of 10%, 5-year bonds for $194,679, yielding a market rate of 8%. Interest is paid on

November 1 and May 1. Lexington 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 May 1.

b. Semiannual interest payment and amortization of premium on

November 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...