The fiscal year ends December 31 for Lake Hamilton Development. To provide funding for its MoonlightBay project, LHD issued 5% bonds with a face amount of $500,000 on November 1, 2018. The bonds sold for$442,215, a price to yield the market rate of 6%. The bonds mature October 31, 2038 (20 years). Interest is paidsemiannually 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 yearending December 31, 2018?2. What amount(s) related to the bonds will LHD report in its balance sheet at December 31, 2018?3. What amount of interest expense related to the bonds will LHD report in its income statement for the yearending December 31, 2019?4. What amount(s) related to the bonds will LHD report in its balance sheet at December 31, 2019?
The fiscal year ends December 31 for Lake Hamilton Development. To provide funding for its Moonlight
Bay project, LHD issued 5% bonds with a face amount of $500,000 on November 1, 2018. The bonds sold for
$442,215, a price to yield the market rate of 6%. The bonds mature October 31, 2038 (20 years). Interest is paid
semiannually 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, 2018?
2. What amount(s) related to the bonds will LHD report in its balance sheet at December 31, 2018?
3. What amount of interest expense related to the bonds will LHD report in its income statement for the year
ending December 31, 2019?
4. What amount(s) related to the bonds will LHD report in its balance sheet at December 31, 2019?
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