1 answer

If I could get help with answers and also explain how to get those. Oriole Electric...

Question:

If I could get help with answers and also explain how to get those.
Oriole Electric sold $3,250,000, 12%, 10-year bonds on January 1, 2020. The bonds were dated January 1 and pay interest annua
Prepare the journal entries for interest and the amortization of the premium in 2020 and 2021. (Credit account titles are aut
Oriole Electric Balance Sheet (Partial) Click if you would like to Show Work for this question: Open Show. Work SHOW LIST OF
Oriole Electric sold $3,250,000, 12%, 10-year bonds on January 1, 2020. The bonds were dated January 1 and pay interest annually on January 1. Oriole Electric uses the discount. The bonds were sold at 103. Prepare the journal entry to record the issuance of the bonds on January 1, 2020. (Credit account titles are automatically indented when amount is entered. Done Date Account Titles and Explanation Debit Credit Jan. 1, 2020 SHOW LIST OF ACCOUNTS UNTO TEXT LINK TO TEXT Prepare a bond premium amortization schedule for the first 4 interest periods Bond Carrying Value Annual Interest Periods Interest to Be Paid Interest Expense to the Recorded Premium Amortization Unamortized Premium we date LINTON INTO TEXT to search
Prepare the journal entries for interest and the amortization of the premium in 2020 and 2021. (Credit account titles are automatically indented when amount entries in the order presented in the problem.) Account Titles and Explanation SHOW LIST OF ACCOUNTS LINK TO TENY LINK TO TEXT Show the balance sheet presentation of the bond lability at December 31, 2021. (Enter account name only and do not provide descriptive information.) Oriole Electra Balance Sheet (Partial)
Oriole Electric Balance Sheet (Partial) Click if you would like to Show Work for this question: Open Show. Work SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO TEXT

Answers

a) Journal entry

Date account and explanation Debit Credit
Jan 1 Cash (3250000*1.03) 3347500
Bonds payable 3250000
Premium on bonds payable 97500

b) Amortization table

Annual interest period Interest to be paid Interest expense to be recorded Premium amortization Unamortized premium Carrying value
Issue date 97500 3347500
1 3250000*12% = 390000 380250 97500/10 = 9750 87750 3337750
2 390000 380250 9750 78000 3328000
3 390000 380250 9750 68250 3318250
4 390000 380250 9750 58500 3308500

Journal entry

Date account and explanation Debit Credit
Dec 31 Interest expense 380250
Premium on bonds payable 9750
Interest payable 390000
Dec 31 Interest expense 380250
Premium on bonds payable 9750
Interest payable 390000

Balance sheet

as on December 31,2021

Current liabilities
Interest payable 390000
Long term liabilities
Bonds payable 3250000
Add:
Premium on bonds payable 78000 3328000
.

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