Question
2018 Jan 1 Issued $8,000,000 of 8%, 10-year bonds payable at 97.Interest payment dates are July 1 and January 1. Jul 1 Paid semiannual interest
2018 | |||
Jan | 1 | Issued $8,000,000 of 8%, 10-year bonds payable at 97.Interest payment dates are July 1 and January 1. | |
Jul | 1 | Paid semiannual interest and amortized bond discount by thestraight-line method on the 8% bonds payable. | |
Dec | 31 | Accrued semiannual interest expense and amortized the bond discount by the straight-line method on the 8% bonds payable. | |
2019 | |||
Jan | 1 | Paid semiannual interest. | |
2028 | |||
Jan | 1 | Paid the 8% bonds at maturity. |
Requirement 2. At December 31, 2018, after all year-end adjustments have been made, determine the carrying amount of Lamothe Lamothe's bonds payable, net.
At December 31, 2018, after all year-end adjustments, the carrying amount of the bonds payable is $ |
| . |
Requirement 3. For the six months ended July 2018,
determine the following for LamotheLamothe: a. Interest expense and b. Cash interest paid. What causes interest expense on the bonds to exceed cash interest paid?
For the six months ended July 1, 2018 determine the following:
a. | Interest expense is $ |
| . |
b. | Cash interest paid is $ |
| . |
What causes interest expense on the bonds to exceed cash interest paid?
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