Cole Corporation issued $400,000, 7%, 20-year bonds on January 1, 2014, for $360,727. This price resulted in an effective-interest rate of 8% on the bonds. Interest is payable annually on January 1. Cole uses the effective-interest method to amortize bond premium or discount.
Prepare the schedule using effective-interest method to amortize bond premium or discount of Cole Corporation. (Round answers to 0 decimal places, e.g. 125.)
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Interest
Periods
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Interest to
Be Paid
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Interest Expense
to Be Recorded
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Discount
Amortization
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Unamortized
Discount
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Bond
Carrying Value
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Issue date
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$
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$
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$
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$
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$
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1
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2
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- Prepare the journal entries to record the issuance of the bonds. (Round answers to 0 decimal places, e.g. 125.) - Jan. 1, 2014
- Prepare the journal entries to record the accrual of interest and the discount amortization on December 31, 2014. (Round answers to 0 decimal places, e.g. 125.)
- Prepare the journal entries to record the payment of interest on January 1, 2015. (Round answers to 0 decimal places, e.g. 125.)