Laurance Corporation issued P 400,000, 7%, 20-year bonds on January 1, 2017, for P 360,7217 This price resulted in an effective interest rate of 8% on the bonds. Interest is payable annual on January 1, Laurance uses the effective interest method to amortize bond premium or discount. Instructions prepare the journal entries to record the following (Round to the nearest dollar) a. The issuance of bonds b. The accrual of interest and the discount amortization on December 31, 2017. c. The payment of interest on January 1, 2018.
Laurance Corporation issued P 400,000, 7%, 20-year bonds on January 1, 2017, for P 360,7217 This price resulted in an effective interest rate of 8% on the bonds. Interest is payable annual on January 1, Laurance uses the effective interest method to amortize bond premium or discount. Instructions prepare the journal entries to record the following (Round to the nearest dollar) a. The issuance of bonds b. The accrual of interest and the discount amortization on December 31, 2017. c. The payment of interest on January 1, 2018.
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:Laurance Corporation issued P 400,000, 7%, 20-year bonds on January 1, 2017, for P 360,7217.
This price resulted in an effective interest rate of 8% on the bonds. Interest is payable annually
on January 1, Laurance uses the effective interest method to amortize bond premium or
discount.
Instructions
prepare the journal entries to record the following (Round to the nearest dollar)
a. The issuance of bonds
b. The accrual of interest and the discount amortization on December 31, 2017.
c. The payment of interest on January 1, 2018.
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