Question
E10-15 (Supplement 10B) Recording the Effects of a Discount Bond Issue and First Interest Payment and Preparing a Discount Amortization Schedule (Effective-Interest Amortization) [LO 10-S2]
E10-15 (Supplement 10B) Recording the Effects of a Discount Bond Issue and First Interest Payment and Preparing a Discount Amortization Schedule (Effective-Interest Amortization) [LO 10-S2]
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On January 1, when the market interest rate was 8 percent, Seton Corporation completed a $280,000, 7 percent bond issue for $261,214. The bonds pay interest each December 31 and mature in 10 years. Assume Seton Corporation uses the effective-interest method to amortize the bond discount.
E10-15 Part 3
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Prepare a bond discount amortization schedule for these bonds. (Do not round intermediate calculations. Round your answers to the nearest dollar.)
Changes During the Period Ending Bond Liability Balances Period Ended Interest Expense Cash Paid Discount Amortized Bonds Payable Discount on Bonds Payable Carrying Value Start 0 Yr 1 End 20,897 1,297 19,600 19,600 19,600 280,000 280,000 280,000 280,000 Yr 2 End Yr 3 End 280,000 280,000 Yr 4 End 280,000 280,000 280,000 Yr 5 End 280,000 280, Yr 6 End 000 Yr 7 End 19,600 19,600 19,600 19,600 19,600 19,600 19,600 Yr 8 End 280,000 280,000 280,000 280,000 280,000 280,000 280,000 Yr 9 End Yr 10 End 280,000 0
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