Lassen Corporation issued 15 year term bonds on January 1, 2015 with a face value of...

Lassen Corporation issued 15 year term bonds on January 1, 2015 with a face value of $500,000. The face interest rate is 8 percent and interest is payable semi-annually on June 30 and December 31. The bonds were issued to yield an effective annual rate of 10 percent.

a. Prepare Journal entry to record the sale of the bond

b. Using the effective interest rate method, calculate and record the interest expense for year one

c. Prepare the partial balance sheet showing the carrying value (book value) of the bonds payable on December 31, 2015.

d. On January 1, 2016, $200,000 of the bonds was retired at 102. Calculate the gain or loss from the retirement of the bonds.

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Expert Solution

ekkarill92 answered 11 months ago

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