P10-10A
Prepare journal entries to record issuance of bonds, payment of interest, and amortization of bond discount using effective interest method.
On January 1, 2014, Lock Corporation |
issued |
$ 1,800,000 |
face |
value, |
5 % |
|
10 |
-year bonds at |
$ 1,667,518 |
This price resulted in an effective-interest rate of |
6 % on the bonds. Lock uses the effective-interest method to amortize bond premium or
discount. The bonds pay annual interest January 1.
Instructions:( Round all computations to the nearest dollar.)