Problem 10-10A On January 1, 2014, Lock Corporation issued $1,878,000face value,6%,10- year bonds at $1,625,969. This price
Question:
Problem 10-10A
On January 1, 2014, Lock Corporation issued $1,878,000face value,6%,10- year bonds at $1,625,969. This price resulted in an effective-interest rate of8% on the bonds. Lock uses the effective-interest method to amortize bond premium or discount. The bonds pay annual interest January 1.
Prepare the journal entry to record the issuance of the bonds on January 1, 2014.(Round answers to 0 decimal places, e.g. 125. Credit account titles are automatically indented when amount is entered. Do not indent manually.)amount is entered. Do not indent manually.)amount is entered. Do not indent manually.)amount is entered. Do not indent manually.)
Date
Account Titles and Explanation
Debit
Credit
Jan. 1
Prepare a mortization table through December 31, 2016 (three interest periods) for this bond issue. table through December 31, 2016 (three interest periods) for this bond issue.amortization table through December 31, 2016 (three interest periods) for this bond issue. table through December 31, 2016 (three interest periods) for this bond issue.(Round answers to 0 decimal places, e.g. 125.)
LOCK CORP.
Bond Discount Amortization
Effective-Interest MethodAnnual Interest Payments
Annual
Interest
Periods
Interest
to Be
Paid
Interest
Expense
to Be
Recorded
Discount
Amortization
Unamortized
Discount
Bond
Carrying
Value
Issue date$
$
$
$
$
1
2
3
Prepare the journal entry to record the accrual of interest and the amortization of the discount on December 31, 2014.(Round answers to 0 decimal places, e.g. 125. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
DAte
Account Titles and Explanation
Debit
Credit
Dec. 31
Prepare the journal entry to record the payment of interest on January 1, 2015.(Round answers to 0 decimal places, e.g. 125. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Date
Account Titles and Explanation
Debit
Credit
Jan. 1
Prepare the journal entry to record the accrual of interest and the amortization of the discount on December 31, 2015.(Round answers to 0 decimal places, e.g. 125. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
DAte
Account Titles and Explanation
Debit
Credit
Dec. 31
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