Lassen Corporation issued ten-year term bonds on January 1, 20x5, with a face value of $800,000. The face interest rate is 6 percent and interest is payable semiannually on June 30 and December 31. The bonds were issued for $690,960 to yield an effective annual rate of 8 percent. The effective interest method of amortization is to be used. The entry to record the bond interest expense on the
first interest payment date is: (Round answer to the nearest dollar.)
A) Bond Interest Expense 24,000 Cash 24,000
B) Bond Interest Expense 27,638 Unamortized BondDiscount 3,638Cash 24,000
C) Bond Interest Expense 27,638 Cash 27,638
D) Bond Interest Expense 27,638 Unamortized BondDiscount 27,638
B
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