Exercise 10-1 C.S. Lewis Company had the following transactions involving notes payable. July 1, 2015 Borrows $51,000 from First National Bank by signing a 9-month, 8% note. Nov. 1, 2015 Borrows $ 66,000 from Lyon County State Bank by signing a 3-month, 6% note. Dec 31, 2015 Prepares adjusting entries. Feb. 1, 2016 Pays principal and interest to Lyon County State Bank Apr. 1, 2016 Pays principal and interest to First National Bank Prepare journal entries for each of the transactions. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit Date July 1, 2015 Nov. 1, 2015 Dec 31, 2015 (Adjusting entry for First National Bank note.) Dec 31, 2015 (Adjusting entry for Lyon County State Bank note.) Feb. 1, 2016 Apr. 1, 2016 Adcock Company issued $268,000, 5%, 20-year bonds on January 1, 2015, at 103. Interest is payable semiannually on July 1 and January 1. Adcockuses straight-line amortization for bond premium or discount. Prepare the journal entry to record the issuance of the bonds. (Credit account titles are autom atically indented when am ount is entered. Do not indent manually.) Debit Credit Date Account Titles and Explanation Jan. 1, 2015 SHOW LIST OF ACCOUNTS Prepare the journal entry to record the payment of interest and the premium amortization on July 1, 2015, assuming that interest was not accrued on June 30. (Credit account titles are automatically indented when am ount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit Date July 1, 2015 SHOW LIST OF ACCOUNTS Prepare the journal entry to record the accrual of interest and the premium amortization on December 31, 2015. (Credit account titles are autom atically indented when amount is entered. Do not indent manually.) Debit Credit Date Account Titles and Explanation Dec 31, 2015 SHOW LIST OF ACCOUNTS Prepare the journal entry to record the redemption of the bonds at maturity, assuming interest for the last interest period has been paid and recorded. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Debit Credit Date Account Titles and Explanation Jan. 1, 2035 Exercise 10-18 Lorance Corporation issued $846,000, 9%, 10-year bonds on January 1, 2015, for $793,285. This price resulted in an effective interest rate of 10% on the bonds. Interest is payable semiannually on July 1 and January 1. Lorance uses the effective interest method to amortize bond premium or discount. Prepare the journal entry to record the issuance of the bonds. (Round answers to o decimal places, e.g. 15,250. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Jan. 1 SHOW LIST OF ACCOUNTS Prepare the journal entry to record the payment of interest and the discount amortization on July 1, 2015, assuming that interest was not accrued on June 30. (Round answers to 0 decimal places, e.g. 15,250. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit July 1 SHOW LIST OF ACCOUNTS Prepare the journal entry to record the accrual of interest and the discount amortization on December 31, 2015. (Round answers to o decimal places, e.g. 15,250. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Dec. 31
