Prepare journal entries to record the following transactions relating to long-termbonds of Lancaster Inc. Show calculations and round to the nearest dollar. a) On June 1, 2023, Lancaster Inc. issued $400,000, 6% bonds for $391,760, including accrued interest. The bonds were dated February 1, 2023, and interest is payable semi-annually on February 1 and August 1 with the bonds maturing on February 1, 2033. The bonds are callable at 102. b) On August 1, 2023, Lancaster paid the semi-annual interest and recorded the amortization of the discount or premium, using straight-line amortization. c) On February 1, 2025, Lancaster paid the semi-annual interest and recorded amortization of the discount or premium. Assume that a reversing entry was made on January 1, 2025. d) The company then purchased $240,000 of the bonds at the call price Do not give answer in image

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Excel Applications for Accounting Principles

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ISBN:9781111581565

Author:Gaylord N. Smith

Publisher:Gaylord N. Smith

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Prepare journal entries to record the following transactions relating to long-term
bonds of Lancaster Inc. Show calculations and round to the nearest dollar.

a) On June 1, 2023, Lancaster Inc. issued $400,000, 6% bonds for $391,760,
including accrued interest. The bonds were dated February 1, 2023, and
interest is payable semi-annually on February 1 and August 1 with the bonds
maturing on February 1, 2033. The bonds are callable at 102.

b) On August 1, 2023, Lancaster paid the semi-annual interest and recorded
the amortization of the discount or premium, using straight-line amortization.

c) On February 1, 2025, Lancaster paid the semi-annual interest and recorded
amortization of the discount or premium. Assume that a reversing entry was
made on January 1, 2025.

d) The company then purchased $240,000 of the bonds at the call price

Do not give answer in image

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