Exercise 10-21 Oriole Company issued $472,500, 7%, 15-year bonds on December 31,

Question

Exercise 10-21 Oriole Company issued $472,500, 7%, 15-year bonds on December 31, 2016, for $453,600. Interest is payable annually on December 31, Oriole uses the straight-line method to amortize bond premium or discount. Prepare the journal entries to record the following events. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) (a) The issuance of the bonds. (b) The payment of interest and the discount amortization on December 31, 2017 (c) The redemption of the bonds at maturity, assuming interest for the last interest period has been paid and recorded No. Date Account Titles and Explanation Debit Credit (a) Dec. 31, 2016 (b) Dec. 31, 2017 (c) Dec. 31, 2031 SHOW LIST OF ACCOUNTS

Explanation / Answer

Journal entry :

Date accounts & explanation debit credit Dec 31,2016 Cash 453600 Discount on bonds payable 18900 Bonds payable 472500 (To record issue bonds payable) Dec 31,2017 Interest expense 34335   Discount on bonds payable (18900/15) 1260 Cash (472500*7%) 33075 (To record interest paid) Dec 31,2031 Bonds payable 472500 Cash 472500 (To record redemption of bonds)

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.