Fundamentals of Financial Accounting 4th Edition by Fred Phillips,Robert Libby,Patricia Libby

Exercise 12

(Supplement 10C) Recording the Effects of a Discount Bond Issue and First Interest Payment and Preparing a Discount Amortization Schedule (Simplified Effective-interest Amortization)
Refer to the information in E10-14 and assume Seton Corporation accounts for the bond using the simplified effective-interest method shown in chapter supplement 10C.
Required:
1. Prepare the journal entry to record the bond issuance.
2. Prepare the journal entry to record the interest payment on December 31, 2013.
3. Prepare a bond discount amortization schedule for these bonds. Round calculations to the nearest dollar.