Question

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.

Instructions
Prepare the journal entries to record (round to the nearest dollar):
(a) The issuance of the bonds.
(b) The accrual of interest and the discount amortization on December 31, 2014.
(c) The payment of interest on January 1, 2015.



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  • CreatedApril 07, 2014
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