Lorance SpA issued 400,000, 7%, 20-year bonds on January 1, 2020, for 360,727. This price resulted in
Question:
Lorance SpA issued €400,000, 7%, 20-year bonds on January 1, 2020, 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, 2020.
c. The payment of interest on January 1, 2021.
Step by Step Answer:
2020 a Jan 1 Cash 360727 Bonds Payable 360727 b Dec 31 ...View the full answer
Financial Accounting with International Financial Reporting Standards
ISBN: 978-1119504306
4th edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
Related Video
A journal entry is an act of keeping or making records of any transactions either economic or non-economic. Transactions are listed in an accounting journal that shows a company\'s debit and credit balances. The journal entry can consist of several recordings, each of which is either a debit or a credit
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