Effective interest rate on the bonds

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Reference no: EM131215785

Lanca Corp, based in the US, prepares US GAAP consolidated financial statements. The company has asked you to determine the adjustments needed to convert the 2015 US GAAP financial statements to a set of IFRS financial statements. For each item below indicate the adjusting entry needed; if no entry is needed enter "none” as your answer.

On January 1, 2014 the company issued $10,000,000 of 5 percent bonds at par value that mature in five years on December 31, 2018. Cost incurred in issuing the bonds were $500,000. Interest is paid on the bonds annually. The effective interest rate on the bonds 5% excluding bond issuance cost and 6.192% including bond issuance cost.

Reference no: EM131215785

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