On January 1, 2020, Oriole Corporation issued $1,550,000 face value, 6%, 10-year bonds at $1,441,134. This price resulted in an effective-interest rate of 7% on the bonds. Lock uses the effective-interest method to amortize bond premium or discount. The bonds pay annual interest on January 1.
Prepare the journal entry to record the issuance of the bonds on January 1, 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Date |
Account Titles and Explanation |
Debit |
Credit |
January 1, 2020 | |||
eTextbook and Media
List of Accounts
Prepare an amortization table through December 31, 2022 (three interest periods) for this bond issue. (Round answers to 0 decimal places, e.g. 15,250.)
LOCK CORPORATION |
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Annual Interest Periods |
Interest to Be Paid |
Interest Expense to Be Recorded |
Discount Amortization |
Unamortized Discount |
Bond Carrying Value |
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Issue date |
$ |
$ |
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1 |
$ |
$ |
$ |
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2 |
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3 |
eTextbook and Media
List of Accounts
Prepare the journal entry to record the accrual of interest and the amortization of the discount on December 31, 2020. (Round answers to 0 decimal places, e.g. 15,250. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Date |
Account Titles and Explanation |
Debit |
Credit |
Dec. 31, 2020 |
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eTextbook and Media
List of Accounts
Prepare the journal entry to record the payment of interest on January 1, 2021. (Round answers to 0 decimal places, e.g. 15,250. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Date |
Account Titles and Explanation |
Debit |
Credit |
Jan. 1, 2021 |
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eTextbook and Media
List of Accounts
Prepare the journal entry to record the accrual of interest and the amortization of the discount on December 31, 2021. (Round answers to 0 decimal places, e.g. 15,250. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Date |
Account Titles and Explanation |
Debit |
Credit |
Dec. 31, 2021 |
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Please show your work and the formulas used for my understanding of the question
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