What amount of interest expense related to the bonds

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Reference no: EM13863680

The fiscal year ends December 31 for Lake Hamilton Development. To provide funding for its Moonlight Bay project, LHD issued 9% bonds with a face amount of $550,000 on November 1, 2016. The bonds sold for $502,815, a price to yield the market rate of 10%. The bonds mature October 31, 2036 (20 years). Interest is paid semi annually on April 30 and October 31.

Required:

1. What amount of interest expense related to the bonds will LHD report in its income statement for the year ending December 31, 2016?

Interest Expense: $8,380

2. What amount(s) related to the bonds will LHD report in its balance sheet at December 31, 2016?

Bonds Payable:

Interest Payable: $8,250

3. What amount of interest expense related to the bonds will LHD report in its income statement for the year ending December 31, 2017?

Interest Expense:

4. What amount(s) related to the bonds will LHD report in its balance sheet at December 31, 2017?

Bond Payable:

Interest Payable:

Reference no: EM13863680

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