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Lorance Corporation issued $540,000, 8%, 20-year bonds on January 1, 2017, for $490,703. This price resulted in an effective-interest rate of 9% on the bonds.
Lorance Corporation issued $540,000, 8%, 20-year bonds on January 1, 2017, for $490,703. This price resulted in an effective-interest rate of 9% on the bonds. Interest is payable annually on 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 0 decimal places, e.g. 15,250. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
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