PA10-7 (Supplement 10B) Recording Bond Issue, Interest Payments (Effective-Interest Amortization), and Early Bond Retirement [LO 10-S2]

14 value: 2.50 points PA10-7 (Supplement 10B) Recording Bond Tssue, Interest Payments (Effective-Interest Amortization), and Early Bond Retirement Cro 10-S2] On January 1, 2015, Surreal Manufacturing issued 520 bonds, each with a face value of $1,000, a stated interest rate of 3 percent paid annually on December 31, and a maturity date of December 31, 2017. On the issue date, the market interest rate was 4 percent, so the tota proceeds from the bond issue were $50s,572. Surreal uses the effective- interest bond amortization method and adjusts for any rounding errors when recording interest in the final year. Required: 1. Prepare a bond amortization schedule. (Round your answers to the nearest whole dollar. Make sure that the Carrying value equals face vahue of the bond in the last period 1nterest expense in the last period will result in the amount in Discount Amortized equaling Discount on Bonds Payable.) Changes During the Period Ending Bond Liability Balances Period Discount Payable Discount on Value Amortized Bonds Bonds Payable Carrying Interest Cash Paid Ended Expense 01/01/15 12/31/15 12/31/16 12/31/17