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 $11,500 and a coupon rate of 5 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 4 percent. Houston uses the effective-interest amortization method. (FV of $1 (https://ezto.mheducation.com/extMedia/bne/accounting/Libby_10e/FV1.jpg), PV of $1 (https://ezto.mheducation.com/extMedia/bne/accounting/Libby_10e/PV1.jpg), FVA of $1 (https://ezto.mheducation.com/extMedia/bne/accounting/Libby_10e/FVA1.jpg), and PVA of $1 (https://ezto.mheducation.com/extMedia/bne/accounting/Libby_10e/PVA1.jpg)

)

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

Required:

1

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

2

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

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 Compary issued a bond with a face value of $11,500 and a coupon rate of 5 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 4 percent Houston uses the effective-interest amortization method. (FV of \$1, PV of \$1, EVA of \$1, and PVA of \$1) Note: Use appropriate factor(s) from the tables provided. Required: 1. Complete a bond amortization schedule for all three years of the bond's life. 2. What amounts will be reported on the income statement and balance sheet at the end of Year 1 and Year 2? Complete this question by entering your answers in the tabs below. Complete a bond amortization schedule for all three vears of the bonds life. Note: Enter all values as postive values. Aound your intermediate calculations and final answers to whole doliars. What amounts will be reported on the income statement and balance sheet at the end of Year 1 and Year 2? Note: Round your intermediate calculations and final answers to whole dollars