Lao Company issued 500,000 of 5-year, 8% bond at 97 on January 1, 2020. the bonds pay interest annually, Instructions a. 1. Prepare journal entry to record the issuance of the bonds. 2. Compute the total cost of borrowing for these bonds b. Repeat requirements from part (a), assuming the bonds were issued at 105.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Lao Company issued 500,000 of 5-year, 8% bond at 97 on January 1, 2020. the bonds pay interest annually,

Instructions

a. 1. Prepare journal entry to record the issuance of the bonds.

2. Compute the total cost of borrowing for these bonds

b. Repeat requirements from part (a), assuming the bonds were issued at 105.

 

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