Lehigh University is planning to issue 5 year bonds with a face value of $50,000 on January 1, 2016. The coupon or stated rate for the bond is 10% and is paid quarterly. The market rate for similar bonds of this duration and risk is 8%.

a. Provide the journal entry LU will use to record the interest expense and payment on December 31, 2016.

b. On March 31, 2017, Lehigh decided to retire the bond early. To compensate bond holders, Lehigh is paying 110% of the face value of the bond. Provide the journal entry LU will use for the early retirement of this bond.

c. Provide the journal entry LU will use to record the issuance of this bond.

Answer rating: 100% (QA)

a On December 31 2016 Lehigh University will record the interest expense and payment for the bond Th... View the full answer