On May 1, 2021, Oriole Corp. issued $855,000 of 5-year, 8% bonds at 98. The bonds...

On May 1, 2021, Oriole Corp. issued $855,000 of 5-year, 8% bonds at 98. The bonds pay interest annually on May 1. Oriole's year end is April 30.

Record the issue of the bonds on May 1, 2021.

Date	Account Titles and Explanation	Debit	Credit
May 1

Calculate the effective rate of the bonds using Excel or a financial calculator. (Round answer to 4 decimal places, e.g. 1.5751.)

Effective rate

Prepare an effective interest amortization table for this bond. (Round answers to 0 decimal places, e.g. 5,276.)

Oriole CORP. Bond Discount Amortization Table Effective Interest Method—Annual Interest Payments
Date	Interest Payment	Interest Expense	Discount Amortization	Bond Amortized Cost
May 1, 2021	$	$	$	$
May 1, 2022
May 1, 2023
May 1, 2024
May 1, 2025
May 1, 2026

Record the accrual of interest at April 30, 2022. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal places, e.g. 5,276.)

Date	Account Titles and Explanation	Debit	Credit
Apr. 30


	(To accrue interest expense.)

Record the interest payment on May 1, 2022. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Date	Account Titles and Explanation	Debit	Credit
May 1

	(To record interest payment.)

Assume that on May 1, 2022, after payment of the interest, Oriole redeems all of the bonds at 104. Record the redemption of the bonds. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal places, e.g. 5,276.)

Date	Account Titles and Explanation	Debit	Credit
May 1


	(To record redemption of bonds.)

Solutions

Expert Solution

Excel IRR function is used for effective rate

ekkarill92 answered 1 year ago

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