Luke Corp. issued $2,000,000 of 20 year, calable bonds on July 1 Year 1, with interest...

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Luke Corp. issued $2,000,000 of 20 year, calable bonds on July 1 Year 1, with interest payable on June 30 and December 31. Th

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Answer 1

Answer #1

Interest expense for 6 months = Par value*Interest rate

= 2,000,000*9%*1/2

= $90,000

The entry will be c.

Interest Expense 90,000

Cash 90,000

(To record interest expense for the year)

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Answer 2

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