The fiscal year ends December 31 for Lake Hamilton Development. To provide funding for its Moonlight Bay project, LHD issued 5% bonds with a face amount of $500,000 on November 1, 2024. The bonds sold for $442,215, a price to yield the market rate of 6%. The bonds mature October 31, 2043 (20 years). Interest is paid semiannually on April 30 and October 31 and is determined using the effective interest method. Required: 1. What amount of interest expense related to the bonds will LHD report in its income statement for the year ending December 31, 2024? 2. What amount(s) related to the bonds will LHD report in its balance sheet at December 31, 2024? 3. What amount of interest expense related to the bonds will LHD report in its income statement for the year ending December 31, 2025? 4. What amount(s) related to the bonds will LHD report in its balance sheet at December 31, 2025? Note: For all requirements, do not round your intermediate calculations. Enter your answers in whole dollars. Answer is complete but not entirely correct. 4,167 X 442,215 X 4,167 30,723 X 443,771 X 4,167 1. Interest expense 2. Net bonds payable 2. Interest payable 3. Interest expense 4. Net bonds payable 4. Interest payable $ $ $ $ $ $

The fiscal year ends December 31 for Lake Hamilton Development. To provide funding for its Moonlight Bay project, LHD issued 5% bonds with a face amount of $500,000 on November 1, 2024. The bonds sold for $442,215, a price to yield the market rate of 6%. The bonds mature October 31, 2043 (20 years). Interest is paid semiannually on April 30 and October 31 and is determined using the effective interest method. Required: 1. What amount of interest expense related to the bonds will LHD report in its income statement for the year ending December 31, 2024? 2. What amount(s) related to the bonds will LHD report in its balance sheet at December 31, 2024? 3. What amount of interest expense related to the bonds will LHD report in its income statement for the year ending December 31, 2025? 4. What amount(s) related to the bonds will LHD report in its balance sheet at December 31, 2025? Note: For all requirements, do not round your intermediate calculations. Enter your answers in whole dollars. Answer is complete but not entirely correct. 4,167 X 442,215 X 4,167 30,723 X 443,771 X 4,167 1. Interest expense 2. Net bonds payable 2. Interest payable 3. Interest expense 4. Net bonds payable 4. Interest payable $ $ $ $ $ $

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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