Problem 14-1

The following amortization and interest schedule reflects the issuance of10-year bonds by Oriole Corporation on January 1, 2011, and the subsequent interest payments and charges. The company?s year-end is December 31, and financial statements are prepared once yearly.

The following amortization and interest schedule reects the issuance of 10-year bonds by Oriole Corporation on January 1, 2011, and the subsequent interest payments and charges. The company's yearend is December 31, and nancial statements are prepared once yearly. Amortization Schedule Amount Carrying Year Cash Interest Unamortized Value 1/1/2011 $37,843 $ 150,657 2011 $20,735 $22,599 35,979 152,521 2012 20,735 22,878 33,836 154,664 2013 20,735 23,200 31,371 157,129 2014 20,735 23,569 28,537 159,963 2015 20,735 23,994 25,278 163,222 2016 20,735 24,483 21,530 166,970 2017 20,735 25,046 17,219 171,281 2018 20,735 25,692 12,262 176,238 2019 20,735 26,436 6,561 181,939 2020 20,735 27,296 188,500 (a) Indicate whether the bonds were issued at a premium or a discount. Discount 6 (b) Indicate whether the amortization schedule is based on the straightline method or the effectiveinterest method. Effective interest method (c) Determine the stated interest rate and the effective-interest rate. (Round answers to 0 decimal places, e.g. 18%.) The stated rate |:' % The effective rate |:| % (d) On the basis of the schedule above, prepare the journal entry to record the issuance of the bonds on January 1, 2011. (Ifno entry is required, select "No Entry" for the account titles and enter a for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit January 1, 2011 [1 [1 [1 :: :: (e) 0n the basis of the schedule above, prepare the journal entry to reect the bond transactions and accruals for 2011. (Interest is paid January 1.) (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit December 31. 2\" C E E E E E (f) 0n the basis of the schedule above, prepare the journal entries to reect the bond transactions and accruals for 2018. Oriole Corporation does not use reversing entries. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Ties and Explanation EECI :: :JE