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Prepare the journal entry to record the bond issuance

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Reference no: EM13868049

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.

Reference no: EM13868049

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