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On June 30, 2020, Oriole Company issued $3,400,000 face value of 13 %, 20-year bonds at $3,655,780, a yield of 12 %. Oriole uses
On June 30, 2020, Oriole Company issued $3,400,000 face value of 13 %, 20-year bonds at $3,655,780, a yield of 12 %. Oriole uses the effective-interest method to amortize bond premium or discount. The bonds pay semiannual interest on June 30 and December 31 Prepare the journal entries to record the following transactions. (Round answer to O decimal places, eg. 38,548. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) (1) The issuance of the bonds on June 30, 2020. (2) The payment of interest and the amortization of the premium on December 31, 2020. (3) The payment of interest and the amortization of the premium on June 30, 2021. (4) The payment of interest and the amortization of the premium on December 31, 2021. Date Account Titles and Explanation June 30, 2020 Cash Premium on Bonds Payable Debit 3655780 Bonds Payable December Interest Expense 219347 31, 2020 Premium on Bonds Payable 1653 Cash June 30, Interest Expense 2021 December 219248 Premium on Bonds Payable 1752 Cash Interest Expense 31, 2021 Premium on Bonds Payable Cash 219142 1858 Credit 255780 3400000 221000 221000 221000
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