Exercise 10-22 Cole Corporation issued $440,000, 8%, 22-year bonds on January 1, 2014, for $362,811. This price resulted in an effective-interest rate of 10% 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. 150.)
Interest
Periods Interest to
Be Paid Interest Expense
to Be Recorded
Discount
Amortization Unamortized
Discount Bond
Carrying Value
Issue date $ $ $ $ $
1
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. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Date Account Titles and Explanation Debit Credit
Jan. 1, 2014
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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. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Date Account Titles and Explanation Debit Credit
Dec. 31, 2014
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Prepare the journal entries to record the payment of interest on January 1, 2015. (Round answers to 0 decimal places, e.g. 125. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Date Account Titles and Explanation Debit Credit
Jan. 1, 2015
