Question: E10-15 (Algo) Preparing a Bond Amortization Schedule for a Bond Issued at a Premium and Determining Reported Amounts LO10-5 On January 1 of this year,

E10-15 (Algo) Preparing a Bond Amortization Schedule for a Bond Issued at a Premium and Determining Reported Amounts LO10-5

On January 1 of this year, Houston Company issued a bond with a face value of $19,500 and a coupon rate of 6 percent. The bond matures in 3 years and pays interest every December 31. When the bond was issued, the annual market rate of interest was 5 percent. Houston uses the effective-interest amortization method. (FV of $1, PV of $1, FVA of $1, and PVA of $1)

Note: Use appropriate factor(s) from the tables provided.

Required:

Complete a bond amortization schedule for all three years of the bond's life.

What amounts will be reported on the income statement and balance sheet at the end of Year 1 and Year 2?

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