On May 1, 2021, Cullumber Corp. issued $845,000 of 5 year, 6% bonds at 98. The bonds pay interest annually on May 1. Cullumber's year end is April 30. Record the issue of the bonds on May 1, 2021. (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) Date Account Titles and explanation Debit Credit May 1 828100 Cash Bonds Payable 828100 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.) Cullumber CORP. Bond Discount Amortization Table Effective Interest Method-Annual Interest Payments Interest Expense Discount Amortization Interest Payment Bond Amortized $ $ $ B2E Date May 1. 2021 May 1. 2022 May 25350 2023 May 1. 2024 May 1. 2025 May 1. 2026 Record the accrual of interest at April 30, 2022. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. I 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) Date Account Titles and Explanation Debit Credit May 1 To record interest payment Assuming instead that Cullumber 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 Ofor the amounts. Round answers to O decimal places, es. 5,276) Date Account Titles and Explanation Debit Credit Dec. 31 (To accrue interest expense.) May 1 (To record interest payment.) Assume that on May 1, 2022, after payment of the interest Cullumber redeems all of the bonds at 104. 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)
