Problem 10-10A

On January 1, 2017, Indigo Corporation issued $1,800,000 face value, 6%, 10- year bonds at $1,558,437. This price resulted in an effective-interest rate of 8% on the bonds. Indigo uses the effective-interest method to amortize bond premium or discount. The bonds pay annual interest January 1.

Prepare the journal entry to record the issuance of the bonds on January 1, 2017. (Round answers to 0 decimal places, e.g. 125. Credit account titles are automatical indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Jan. 1 SHOW LIST OF ACCOUNTS Prepare an amortization table through December 31, 2019 (three interest periods) for this bond issue. (Round answers to 0 decimal places, e.g. 125.) INDIGO CORP. Bond Discount Amortization Effective-Interest Method-Annual Interest Payments Interest Expense Bond Annual Interest Periods Interest to Be Paid to Be Recorded Amortization Discount Discount Unamortized Carrying Value Issue date