5. Lucio Corporation issues $50.000, 10%, 5-year bonds on January 1, for $52,100. Interest is paid...

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Question

Answer 1

Answer #1

Cash Interest paid =$50,00010%6/12 =$2,500
Discount amortized each period =$2,100/10 =$210
Interest recognized on July 1 =$2,500+$210 =$2,710
The Journal entry for each period shall be:
	Interest Expenses	$2,710
	Discounts on Bond payable		$210
	Cash		$2,500

Answer 2

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