On January 1, 2016, Laramie Company issued $500,000, 4%, five-year bonds payable at 92. The market rate at the date of issue is 6%. Interest is payable semi-annually at each June 30 and December 31. Laramie has a December 31 year-end and uses the effective interest method of amortization.
Required:
A.Prepare the journal entry to record the issuance of the bonds on January 1, 2016.
B.Prepare the journal entry to record the first interest payment and interest expense at June 30, 2016.No entries have yet been made for interest on these bonds.
C.Prepare the journal entry to record the second interest payment and interest expense at December 31, 2016.No entries have been made for these bonds since June 30, 2016.
D.What would the carrying value of the bonds be on December 31, 2016?

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The Answer of On January 1, 2016, Laramie Company issued $500,000, 4%, five-year bonds payable at 92. The market rate at the date of issue is 6%. Interest is payable semi-annually at each June 30 and December 31. Laramie has a December 31 year-end and uses the effective interest method of amortization.
Required:
A.Prepare the journal entry to record the issuance of the bonds on January 1, 2016.
B.Prepare the journal entry to record the first interest payment and interest expense at June 30, 2016.No entries have yet been made for interest on these bonds.
C.Prepare the journal entry to record the second interest payment and interest expense at December 31, 2016.No entries have been made for these bonds since June 30, 2016.
D.What would the carrying value of the bonds be on December 31, 2016?

On January 1, 2016, Laramie Company Issued $500,000, 4%, Five-Year