Oriole Co. is building a new hockey arena at a cost of $2,510,000. It received a downpayment of $490,000 from local businesses to support the project, and now needs to borrow $2,020,000 to complete the project. It therefore decides to issue $2,020,000 of 10%, 10-year bonds. These bonds were issued on January 1, 2016, and pay interest annually on each January 1. The bonds yield 9%.

Prepare the journal entry to record the issuance of the bonds on January 1, 2016.

Date Acount Title Debit Credit

Jan 1 2016 1. Cash 2,149,635

2. Bonds Payable 2,020,000

3. Premium on Bonds Payable 129,635

Prepare a bond amortization schedule up to and including January 1, 2020, using the effective interest method. (Round answers to 0 decimal places, e.g. 38,548.)

Date Cash Paid Interest Expense Premium Amortization Carrying Amount of Bonds

1/1/16

1/1/17

1/1/18

1/1/19

1/1/20