On 3/1/21, Lansing Company sold 6.5% bonds having a maturity value of $800,000 at a price which provides the bondholders with a 5% yield. The bonds are dated 3/1/21 and mature 3/1/26 with interest payable semiannually on 3/1 and 9/1 of each year. Legal and other costs of $12,000 were incurred in connection with the issue. Questions: a. Prepare the amortization table and all journal entries required in 2021. b. The bonds are callable at 101, and on 6/1/23 Lansing called the bonds and retired them. Prepare all journal entries required in 2023.
On 3/1/21, Lansing Company sold 6.5% bonds having a maturity value of $800,000 at a price which provides the bondholders with a 5% yield. The bonds are dated 3/1/21 and mature 3/1/26 with interest payable semiannually on 3/1 and 9/1 of each year. Legal and other costs of $12,000 were incurred in connection with the issue. Questions: a. Prepare the amortization table and all journal entries required in 2021. b. The bonds are callable at 101, and on 6/1/23 Lansing called the bonds and retired them. Prepare all journal entries required in 2023.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
On 3/1/21, Lansing Company sold 6.5% bonds having a maturity value of $800,000 at a price which provides the bondholders with a 5% yield. The bonds are dated 3/1/21 and mature 3/1/26 with interest payable semiannually on 3/1 and 9/1 of each year. Legal and other costs of $12,000 were incurred in connection with the issue.
Questions:
a. Prepare the amortization table and all
b. The bonds are callable at 101, and on 6/1/23 Lansing called the bonds and retired them. Prepare all journal entries required in 2023.
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