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HW for extra credit $5$

$*$E$11\mathrm{.}12($LO $5)$ Lorance SpA issued $400,000,7\%,20-$year bonds on January $1,2020,$ for $360,727.$ This price resulted in an effective$-$interest rate of $8\%$ on the bonds. Interest is payable annually on January $1.$ Lorance uses the effective$-$interest method to amortize bond premium or discount.

Instructions

Prepare the journal entries to record the following. $($Round to the nearest euro.$)$

a$.$ The issuance of the bonds.

b$.$ The accrual of interest and the discount amortization on December $31,2020.$

c$.$ The payment of interest on January $1,2021.$

HW$1$ for extra credit:

Continue this question, and finish the amortization schedule over the first $10$ years from $2020$ to $2030.$

Lorance SpA

Bond Discount Amortization Schedule

$\backslash$table$[[$Period$,$Interest to be paid,Interest Expense,Discount amortization,Bond carrying value$],[2020\mathrm{.}1,,,,360,727$