"P15.8A YLO 6) On January 1, 2020, Lock Corporation issued $1,800,000 face value, 5%, 10-year bonds atS1,667,518. This price resulted in an effective-interest rate of 6% on the bonds. Lock uses the effective- interest method to amortize bond premium or discount. The bonds pay annual interest January 1. Instructions (Round all computations to the nearest dollar.) a. Prepare the journal entry to record the issuance of the bonds on January 1, 2020. b. Prepare an amortization table through December 31, 2022 (three interest periods) for this bond issue. c. Prepare the journal entry to record the accrual of interest and the amortization of the discount on December 31, 2020.

"P15.8A YLO 6) On January 1, 2020, Lock Corporation issued $1,800,000 face value, 5%, 10-year bonds atS1,667,518. This price resulted in an effective-interest rate of 6% on the bonds. Lock uses the effective- interest method to amortize bond premium or discount. The bonds pay annual interest January 1. Instructions (Round all computations to the nearest dollar.) a. Prepare the journal entry to record the issuance of the bonds on January 1, 2020. b. Prepare an amortization table through December 31, 2022 (three interest periods) for this bond issue. c. Prepare the journal entry to record the accrual of interest and the amortization of the discount on December 31, 2020.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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