Prepare journal entries to record issuance of bonds by lucas

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On April 1, 2021 Lucas Communication, Inc. Issued 12% bonds , dated March1, 2021 with a face amount of $30 million. The bonds sold for $29.3 million and mature on February 28, 2024. Interest is paid semiannually on August31 and February 28, Diel Corporation acquired $30,000 of the bonds as a long-term investment. The fiscal years for both companies end December 31, and both company use the straight-line method.

Required:

Problem 1. Prepare the journal entries to record (a) issuance of the bonds by Lucas and (b) Diel investment on April1, 2021

Problem 2. Prepare the journal entries by both companies to record all subsequent events related to the bonds through maturity.

Reference no: EM132669741

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