Question: Using the information from E15.21 and assuming the market rate of interest was 8 percent, make the entries for the first year of the bonds

Using the information from E15.21 and assuming the market rate of interest was 8 percent, make the entries for the first year of the bond’s life and show how Scott would report its bond activities on its 2019 financial statements.

Data from E15.21

Scott Corporation issued a $100,000, eight-year, 7 percent note for cash on June 1, 2019. The note pays interest semiannually and the market rate of interest was 6 percent when the note was issued. Given this information, make the entries for the first year of the note’s life if Scott Corporation has a December 31 fiscal year-end. Show how Scott reports the note on its income statement, balance sheet, and cash flow statement for the year ended December 31, 2019.

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