Solution-Prepare the journal entry at the date of the bond

Prepare the journal entry at the date of the bond purchase

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Reference no: EM132623017

Question - On January 1, 2017, Oriole Company purchased 11% bonds, having a maturity value of $313,000, for $337,348.74. The bonds provide the bondholders with a 9% yield. They are dated January 1, 2017, and mature January 1, 2022, with interest received on January 1 of each year. Oriole Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified as available-for-sale category. The fair value of the bonds at December 31 of each year-end is as follows.

2017 $335,100

2018 $321,600

2019 $320,500

2020 $322,600

2021 $313,000

Required -

(a) Prepare the journal entry at the date of the bond purchase.

(b) Prepare the journal entries to record the interest revenue and recognition of fair value for 2017.

Reference no: EM132623017

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Prepare the journal entry at the date of the bond purchase

Reference no: EM132623017

Reference no: EM132623017

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