On May 1, 2021, Crane Corp. Issued $895,000 of 5-year, 6% bonds at 97. The bonds pay interest annually on May 1, Crane's year end is April 30 Record the issue of the bonds on May 1, 2021. (Credit account tities 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 for the amounts:) Date Account Titles and Explanation Debit Credit May 1 Calculate the effective rate of the bonds using Excel or a financial calculator. (Round answer to 4 decimal places, eg. 1.5751) Effective rate % Prepare an effective interest amortization table for this bond. (Round answers to decimal places, eg. 5,276.) Crane CORP. Bond Discount Amortization Table Effective Interest MethodAnnual Interest Payments Interest Expense Discount Amortization Date Interest Payment Bond Amort May $ 1. 2021 May 1. 2022 May 1. 2023 May 1 Record the accrual of interest at April 30, 2022. (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 for the amounts. Round answers to decimal places, eg,5,276.) Date Account Titles and Explanation Debit Credit Apr 30 (To accrue interest expense.) Record the interest payment on May 1, 2022. (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 for the amounts.) Debit Credit Date Account Titles and Explanation May 1 (To record interest payment) Assuming instead that Crane has a December 31, 2021, year end, prepare the adjusting entry relating to these bonds and the subsequent interest payment on May 1, 2022. (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 for the amounts. Round answers to decimal places, eg. 5,276) Date Account Titles and Explanation Debit Credit Dec 31 To accrue interest expense.) May 1 Assume that on May 1, 2022, after payment of the interest, Crane redeems all of the bonds at 103. Record the redemption of the bonds. (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 for the amounts. Round answers to O decimal places, eg. 5,276.) Date Account Titles and Explanation Debit Credit May 1 (To record redemption of bonds.)
