On January 1, 2016, Orlando Corp and Texas Corp purchased 12% bonds having a maturity value of $342,000 for $367,928.66. The bonds provide the bondholders with a 10% yield. They are dated January 1, 2016, and mature January 1, 2021, with interest receivable December 31 of each year. Orlando Corp and Texas Corp uses the effective interest method to allocate unamortized discount or premium. The bonds are classified as amortized cost investments.

A) Prepare the journal entry at the date of the bond purchase. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to 2 decimal places, e.g. 52.75.)

Date Account Titles and Explanation Debit Credit

Jan 1 ___________________

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B) Prepare a bond amortization schedule. (Round answers to 2 decimal places, e.g. 52.75.)

Schedule of Interest Revenue and Bond Premium Amortization Effective-Interest Method

Date ----Cash Received-- --Interest Revenue ----Premium Amortized ---- Carrying Amount of Bonds

1/1/16

12/31/16

12/31/17

12/31/18

12/31/19

12/31/20

C) Prepare the journal entry to record the interest received and the amortization for 2016. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to 2 decimal places, e.g. 52.75.)

Date Account Titles and Explanation Debit Credit

Dec 31 2016 ___________________

_________________________

_________________________

D) Prepare the journal entry to record the interest received and the amortization for 2017. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to 2 decimal places, e.g. 52.75.)

Date Account Titles and Explanation Debit Credit

Dec 31 2017 ___________________

_________________________

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