Reporting Financial Statement Effects of Bond Transactions Lundholm, Inc., which reports financial statements each December 31, is authorized to issue $250,000 of 7%, 15 -year bonds dated May 1, 2015, with interest payments on October 31 and April 30. Assume the bonds are issued at par on May 1, 2015.

a. Prepare journal entries to record the bond issuance, payment of the first semiannual period's interest, and retirement of $150,000 of the bonds at 103 on November 1, 2016.

General Journal
Date	Description	Debit	Credit
5/1/15	Answer

Answer	Answer
	Answer

Answer	Answer
10/31/15	Answer

Answer	Answer
	Answer

Answer	Answer
11/1/16	Bonds payable	Answer	Answer
	Answer

Answer	Answer
	Answer

Answer

Answer

b. Post the journal entries from part a to their respective T-accounts.

Cash
	Answer	Answer
	Answer	Answer

Loss on Bonds
	Answer	Answer

Bonds Payable
	Answer	Answer

Gain on Bonds
	Answer	Answer

Interest Expense
	Answer	Answer

c. Record each of the transactions from part a in the financial statement effects template.

Use negative signs with answers, when appropriate.

Transaction					Cash Asset		+	Noncash Assets		=	Liabilities		+	Contr. Capital		+	Earned Capital		Revenue	-	Expenses	=	Net income
5/1/15 Issue bonds					$Answer			$Answer			$Answer			$Answer			$Answer		$Answer		$Answer		$Answer
10/31/15 Interest payment on bonds					Answer			Answer			Answer			Answer			Answer		Answer		Answer		Answer
11/1/16 Early retirement of bonds.					Answer			Answer			Answer			Answer			Answer		Answer		Answer		Answer