how to solve this? thank you Oriole SpA issued €400,000, 7%, 20-year bonds on January 1, 2020, for €360,727. This price resulted in an effective-interest rate of 8% on the bonds. Interest is payable annually on January 1. Oriole uses the effective-interest methodto amortize bond premium or discount.Prepare the journal entry to record the accrual of interest and the discount amortization on December 31, 2020.(Round answers to 0 decimal places, e.g. 15,250. Credit account titles are automatically indented whenamount is entered. Do not indent manually.)Date Account Titles and ExplanationDebitCreditDec.Interest Expense31Premium on Bonds PayableInterest Payable

The financial transactions are initially recorded in the form of a journal entries.

Oriole SpA issued €400,000, 7%, 20-year bonds on January 1, 2020, for €360,727. This price resulted in an effective- interest rate of 8% on the bonds. Interest is payable annually on January 1. Oriole uses the effective-interest method to amortize bond premium or discount.

Oriole SpA issued €400,000, 7%, 20-year bonds on January 1, 2020, for €360,727. This price resulted in an effective- interest rate of 8% on the bonds. Interest is payable annually on January 1. Oriole uses the effective-interest method to amortize bond premium or discount.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

how to solve this? thank you

Oriole SpA issued €400,000, 7%, 20-year bonds on January 1, 2020, for €360,727. This price resulted in an effective-
interest rate of 8% on the bonds. Interest is payable annually on January 1. Oriole uses the effective-interest method
to amortize bond premium or discount.
Prepare the journal entry to record the accrual of interest and the discount amortization on December 31, 2020.
(Round answers to 0 decimal places, e.g. 15,250. Credit account titles are automatically indented when
amount is entered. Do not indent manually.)
Date Account Titles and Explanation
Debit
Credit
Dec.
Interest Expense
31
Premium on Bonds Payable
Interest Payable

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