Lorance Corporation issued $850,000, 9%, 10-year bonds on January 1, 2015, for $797,036. This price resulted in an effective-interest rate of 10% on the bonds. Interest is payable semiannually on July 1 and January 1. Lorance uses the effective-interest method to amortize bond premium or discount. Warning Don't show me this message again for the assignment Ok Cancel Prepare the journal entry to record the issuance of the bonds. (Round answers to 0 decimal places, e.g. 15,250. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Jan. 1 Warning Don't show me this message again for the assignment Ok Cancel Show List of Accounts Prepare the journal entry to record the payment of interest and the discount amortization on July 1, 2015, assuming that interest was not accrued on June 30. (Round answers to 0 decimal places, e.g. 15,250. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit July 1 Warning Don't show me this message again for the assignment Ok Cancel Show List of Accounts Prepare the journal entry to record the accrual of interest and the discount amortization on December 31, 2015. (Round answers to 0 decimal places, e.g. 15,250. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Dec. 31 Warning Don't show me this message again for the assignment Ok Cancel Show List of Accounts Question Attempts: 0 of 2 used Save for later Submit Answer

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 5PB: Dixon Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July 1,...

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Prepare the journal entry to record the issuance of the bonds. (Round answers to 0 decimal places, e.g. 15,250. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date	Account Titles and Explanation	Debit	Credit
Jan. 1

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Prepare the journal entry to record the payment of interest and the discount amortization on July 1, 2015, assuming that interest was not accrued on June 30. (Round answers to 0 decimal places, e.g. 15,250. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date	Account Titles and Explanation	Debit	Credit
July 1

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Prepare the journal entry to record the accrual of interest and the discount amortization on December 31, 2015. (Round answers to 0 decimal places, e.g. 15,250. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date	Account Titles and Explanation	Debit	Credit
Dec. 31

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C.S. Lewis Company had the following transactions involving notes payable.

July 1, 2015		Borrows $53,500 from First National Bank by signing a 9-month, 8% note.
Nov. 1, 2015		Borrows $64,800 from Lyon County State Bank by signing a 3-month, 6% note.
Dec. 31, 2015		Prepares adjusting entries.
Feb. 1, 2016		Pays principal and interest to Lyon County State Bank.
Apr. 1, 2016		Pays principal and interest to First National Bank.

Prepare journal entries for each of the transactions. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date	Account Titles and Explanation	Debit	Credit
July 1, 2015

Nov. 1, 2015

Dec. 31, 2015

	(Adjusting entry for First National Bank note.)
Dec. 31, 2015

	(Adjusting entry for Lyon County State Bank note.)
Feb. 1, 2016



Apr. 1, 2016

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Detwiler Orchard issues a $558,020, 10%, 15-year mortgage note to obtain needed financing for a new lab. The terms call for semiannual payments of $36,300 each.

Prepare the entries to record the mortgage loan and the first installment payment. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 0 decimal places e.g. 8,970.)

Account Titles and Explanation	Debit	Credit


(To record mortgage loan)



(To record semiannual payment on mortgage)

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