Entries for bonds payable
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, 2020, Lancaster Inc. issued $ 400,000, 6% bonds for $ 391,760, including accrued interest. The bonds were dated February 1, 2020, and interest is payable semi-annually on February 1 and August 1 with the bonds maturing on February 1, 2030. The bonds are callable at 102.
b) On August 1, 2020, Lancaster paid the semi-annual interest and recorded the amortization of the discount or premium, using straight-line amortization.
c) On February 1, 2022, Lancaster paid the semi-annual interest and recorded amortization of the discount or premium. Assume that a reversing entry was made on January 1, 2022.
d) The company then purchased $ 240,000 of the bonds at the call price.

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The Answer of Entries for bonds payable
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, 2020, Lancaster Inc. issued $ 400,000, 6% bonds for $ 391,760, including accrued interest. The bonds were dated February 1, 2020, and interest is payable semi-annually on February 1 and August 1 with the bonds maturing on February 1, 2030. The bonds are callable at 102.
b) On August 1, 2020, Lancaster paid the semi-annual interest and recorded the amortization of the discount or premium, using straight-line amortization.
c) On February 1, 2022, Lancaster paid the semi-annual interest and recorded amortization of the discount or premium. Assume that a reversing entry was made on January 1, 2022.
d) The company then purchased $ 240,000 of the bonds at the call price.

Entries for Bonds Payable