Lamar Company authorized a $500,000, five-year, 12% bond issue dated October 1, 20A, with
semi-annual interest to be paid each September 30 and March 31. On October 1, 20A, the bonds wer issued (sold) for $497,340.
(a) Give the entry to record the sale of the bonds
(b) It is December 31, 20A, the end of the accounting period. Give the required adjusting entry using straight-line amortization
(c) Was the bond sold at par, at a discount or at a premium?
(d) Will interest expense be greater than or less than the cash payments for interest?

Question

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The Answer of Lamar Company authorized a $500,000, five-year, 12% bond issue dated October 1, 20A, with
semi-annual interest to be paid each September 30 and March 31. On October 1, 20A, the bonds wer issued (sold) for $497,340.
(a) Give the entry to record the sale of the bonds
(b) It is December 31, 20A, the end of the accounting period. Give the required adjusting entry using straight-line amortization
(c) Was the bond sold at par, at a discount or at a premium?
(d) Will interest expense be greater than or less than the cash payments for interest?

Lamar Company Authorized a $500,000, Five-Year, 12% Bond Issue Dated