Lassen Corporation issued ten-year term bonds on January 1, 20x5, with a face value of $800,000. The face interest rate is 8 percent and interest is payable semi-annually on June 30 and December 31. The bonds were issued for $690,960 to yield an effective annual rate of 10 percent. The effective interest method of amortization is to be used. The entry on June 30, 20x5, to record the payment of
interest and amortization of discount is:
A) Bond Interest Expense 32,000 Cash 32,000
B) Bond Interest Expense 34,548 Unamortized BondDiscount 2,548Cash 32,000
C) Bond Interest Expense 34,548 Cash 34,548
D) Bond Interest Expense 32,000 Unamortized BondDiscount 32,000
B
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