On January 1, 2015, Lantau Corp. issued $600,000 of 20 year, 11% bonds for $554,860, yielding a market (yield) rate of 12%. Interest is payable semiannually on June 30 and December 31 a) Confirm the bond issue price

b) Prepare journal entries to record the bond issuance, semiannual interest payment and discount amortization on June 30, 2015, and semi-annual interest payment and discount amortization on December 31, 2015. Use the effective interest rate.

c) Lantau elected to report the bonds in its financial statements at fair value. On December 31, 2015, these bonds were listed in the bond market at a price of 101 (or 101% of par value). What entry is required to adjust the reported value of these bonds to fair value?

d) Prepare a table summarizing the effect of these bonds on earnings for 2015, including interest expense and any unrealized gain or loss resulting from the fair value adjustment in requirement c