Question
Cole Corporation issued $400,000, 7%, 20-year bonds on January 1, 2014, for $360,727. This price resulted in an effective-interest rate of 8% on the bonds.
Cole Corporation issued $400,000, 7%, 20-year bonds on January 1, 2014, for $360,727. This price resulted in an effective-interest rate of 8% on the bonds. Interest is payable annually on January 1. Cole uses the effective-interest method to amortize bond premium or discount.
Prepare the schedule using effective-interest method to amortize bond premium or discount of Cole Corporation.(Round answers to 0 decimal places, e.g. 125.)
Interest Periods | Interest to Be Paid | Interest Expense to Be Recorded | Discount Amortization | Unamortized Discount | Bond Carrying Value | |||||
Issue date | $ | $ | $ | $ | $ | |||||
1 |
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2 |
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Prepare the journal entries to record the issuance of the bonds. (Round answers to 0 decimal places, e.g. 125.) -Jan. 1, 2014
Prepare the journal entries to record the accrual of interest and the discount amortization on December 31, 2014.(Round answers to 0 decimal places, e.g. 125.)
Prepare the journal entries to record the payment of interest on January 1, 2015. (Round answers to 0 decimal places, e.g. 125.)
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