On January 1, 2015, Lenore, Inc. issued $800,000, 6% bonds when the market rate was 7%. Interest is payable semiannually on December 31 and June 30 with bonds maturing on December 31, 2024. The bonds are callable at 103. On December 31, 2018, Lenore retired $400,000 of the bonds at the call price. At the time they retired the bonds, they also paid the accused interest for those bonds retired.

Required:

a. Prepare the journal entry to record the issuance of the bonds.

b. Lenore uses the effective interest method to amortize any discount or premium. Prepare an amortization schedule for the bonds.

c. Prepare any required journal entries for interest payments for the first year - 2015.

d. Prepare all required entries to record the retirement of the bonds on December 31, 2018, including the payment of accrued interest.

Answer rating: 100% (QA)

Part a Since stated rate is less than Market Rate bonds have been issued at discount Issue price of ... View the full answer