On January 1, 2012, Seton Corporation sold a \(\$ 10,000,000,5.5\) percent bond issue. The bonds were dated January 1, 2012, had a yield of 6 percent, pay interest each December 31, and mature 10 years from January \(1,2012\).

\section*{Required:}

1. Prepare the journal entry to record the issuance of the bonds.

2. Prepare the journal entry to record the interest payment on December 31, 2012. Use straight-line amortization.

3. Show how the bond interest expense and the bonds payable should be reported on the financial statements for 2012.