Problem - On January 1, 2014, Lock Corporation issued $1,878,000 face value, 6%, 10- year bonds at $1,625,969. This price resulted in an effective-interest rate of 8% on the bonds. Lock uses the effective-interest method to amortize bond premium or discount. The bonds pay annual interest January 1.
Required - Prepare the journal entry to record the issuance of the bonds on January 1, 2014.