On September 1, 2015, Evansville Lumber Company issued $80 million in 20-year, 10 percent

bonds payable. Interest is payable semiannually on March 1 and September 1. Bond discounts and

premiums are amortized at each interest payment date and at year-end. The company's fiscal year

ends at December 31.

Instructions

A. Make the necessary adjusting entries at December 31, 2015, and the journal entry to record

the payment of bond interest on March 1, 2016, under each of the following assumptions that the bonds were issued at 98.

B. Prepare the necessary adjusting entries at December 31, 2015, and the journal entry to record the payment of bond interest on March 1, 2016, under the assumption that the bonds were issued at 101.

Answer rating: 100% (QA)

A Assuming the bonds were issued at 98 1 Adjusting entry at December 31 2015 Interest Expense 160000... View the full answer