E10-14 (Supplement 10A) Recording the Effects of a Discount Bond Issue and First
ID: 2512405 • Letter: E
Question
E10-14 (Supplement 10A) Recording the Effects of a Discount Bond Issue and First Interest Payment and Preparing a Discount Amortization Schedule (Straight-Line Amortization) [LO 10-S1]
[The following information applies to the questions displayed below.]
E10-14 (Supplement 10A) Recording the Effects of a Discount Bond Issue and First Interest Payment and Preparing a Discount Amortization Schedule (Straight-Line Amortization) [LO 10-S1]
On January 1, when the market interest rate was 10 percent, Seton Corporation completed a $240,000, 8 percent bond issue for $210,496. The bonds pay interest each December 31 and mature in 10 years. Seton amortizes the bond discount using the straight-line method.
References
On January 1, when the market interest rate was 10 percent, Seton Corporation completed a $240,000, 8 percent bond issue for $210,496. The bonds pay interest each December 31 and mature in 10 years. Seton amortizes the bond discount using the straight-line method.
E10-14 (Supplement 10A) Recording the Effects of a Discount Bond Issue and First Interest Payment and Preparing a Discount Amortization Schedule (Straight-Line Amortization) [LO 10-s The following Informanion applies to the questions aisplayed below On January 1, when the market interest rate was 10 percent Seton Corporation completed a $240,000, 8 percent bond issue for $210,496. The boncs pay interest each December 31 and msture in 10 years. Seton amotizes the bond discount using the straight-line method References Section Break E10-14 (Supplement 10A) Recording the Etfects of & Discount Bond Issue and First Interest Payment and Preparing a Discount Amortization Schedule (Straight-Line Amoruzaton) ILO 10-STExplanation / Answer
1 & 2:
In the books of Seton Corporation :
3. Bond Amortization Schedule:
Date General Journal Debit Credit $ $ 1. Cash 210,496 Discount on Bonds Payable 29,504 Bonds Payable 240,000 2. Interest Expense 22,150.40 Discount on Bonds Payable ( 29,504 / 10) 2,950.40 Cash ( 240,000 x 8%) 19,200Related Questions
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