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Lorance Corporation issued $840,000, 8%, 10-year bonds on January 1, 2015, for $785,363. This price resulted in an effective-interest rate of 9% on the bonds.
Lorance Corporation issued $840,000, 8%, 10-year bonds on January 1, 2015, for $785,363. This price resulted in an effective-interest rate of 9% 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 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 Interest Expense 35262117 T Discount on Bonds Pay 1662 Interest Payable 33600Step by Step Solution
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