Refer to the information in E10 14 and assume Seton Corporation
Refer to the information in E10-14 and assume Seton Corporation accounts for the bond using the simplified effective-interest method shown in Chapter Supplement 10C.
Info E10-14
On January 1, when the market interest rate was 9 percent, Seton Corporation completed a $ 200,000, 8 percent bond issue for $ 187,163. The bonds pay interest each December 31 and mature in 10 years. Seton amortizes the bond discount using the straight-line method.
Required:
1. Prepare the journal entry to record the bond issuance.
2. Prepare the journal entry to record the first interest payment on December 31.
3. Prepare a bond discount amortization schedule for these bonds. Round calculations to the nearest dollar.
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