Question - Cole Corporation issued $363,000, 7%, 21-year bonds on January 1, 2014, for $326,641. 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.
Prepare the journal entries to record the issuance of the bonds.
Prepare the journal entries to record the accrual of interest and the discount amortization on December 31, 2014.
Prepare the journal entries to record the payment of interest on January 1, 2015.