1 Presented below are two independent situations.

(a) Snider Corporation incurred the following costs in connection with the issuance of bonds: (1) printing and engraving costs $40,000; (2) legal fees $120,000, and (3) commissions paid to underwriter $320,000. What amount should be reported as Unamortized Bond Issue Costs, and where should

this amount be reported on the balance sheet?

(b) Cey Inc. issued $1,000,000 of 10%, 10-year bonds on June 30, 2014, for $885,296. This price provided a yield of 12% on the bonds. Interest is payable semiannually on December 31 and June 30. If Cey uses the effective-interest method, determine the amount of interest expense to record if financial

statements are issued on October 31, 2014.