1. Journalize the following transactions of Lamo the Communications, Inc.:
2016
Jan 1 Issued $6,000,000 of 9%, 10-year bonds payable at 96. Interest payment dates are July 1 and January 1.
Jul 1 Paid semiannual interest and amortized the bond discount by the straight-line method on the 9% bonds payable.
Dec 31 Accrued semiannual interest expense and amortized the bond discount by the straight-line method on the 9% bonds payable.
2017
Jan 1 Paid semiannual interest.
2026
Jan 1 Paid the 9% bonds at maturity.
2. At December 31, 2016, after all year-end adjustments, determine the carrying amount of Lamo the Communications bonds payable, net.
3. For the six months ended July 1, 2016, determine the following for Lamo the Communications, Inc.:
a. Interest expense
b. Cash interest paid. What causes interest expense on the bonds to exceed cash interest paid?