Bond carrying value Accounting 101

Problem 15-9A (Part Level Submission) On January 1, 2017, Lock Corporation issued $1,800,000 face value, 5%, 10-year bonds at $1,667,518. This price resulted in an effective-interest rate of 6% on the bonds. Lock uses t effective-interest method to amortize bond premium or discount. The bonds pay annual interest on January 1 (a) Your answer is correct. Prepare the journal entry to record the issuance of the bonds on January 1, 2017. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit January 1, 2017 Tcash 1,667,518 Discount on Bonds Payable 132,48 Bonds Payable 1,800,000