Lorance SpA issued 400,000, 7%, 20-year bonds on January 1, 2025, for 360,727. This price resulted in

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Lorance SpA issued €400,000, 7%, 20-year bonds on January 1, 2025, for €360,727.

This price resulted in an effective-interest rate of 8% on the bonds. Interest is payable annually on January 1. Lorance uses the effective-interest method to amortize bond premium or discount.

Instructions Prepare the journal entries to record the following. (Round to the nearest euro.)

a. The issuance of the bonds.

b. The accrual of interest and the discount amortization on December 31, 2025.

c. The payment of interest on January 1, 2026.

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Financial Accounting With International Financial Reporting Standards

ISBN: 9781119787051

5th Edition

Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso

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Question Posted: Apr 04, 2024 11:00 PM

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Lorance SpA issued 400,000, 7%, 20-year bonds on January 1, 2025, for 360,727. This price resulted in

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Financial Accounting With International Financial Reporting Standards

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