Refer to the information in E10-14 and assume Selton Corporation accounts for the bond using the simplified

Question:

Refer to the information in E10-14 and assume Selton Corporation accounts for the bond using the simplified effective-interest method shown in Supplement 10C.

E10-14

On January 1, 2017, when the market interest rate was 9 percent, Selton Corporation completed a $200,000, 8 percent bond issue for $187,163. The bonds were dated January 1, 2017, pay interest each December 31, and mature in ten years on December 31, 2026. 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 interest payment on December 31, 2017.

3. Prepare a bond discount amortization schedule for these bonds. Round calculations to the nearest dollar.

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...

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