Question

Chapter 10 Exercise/Problems Saved Help Save & Exit Submit Required information The following information applies to the questions displayed below.) Part 2 of 2 On January 1, when the market interest rate was 9 percent, Seton Corporation completed a $150,000,8 percent bond issue for $140.372. The bonds pay interest each December 31 and mature in 10 years. Assume Seton Corporation uses the effective-interest method to arnortize the bond discount. 2.77 points 3. Prepare a bond discount amortization schedule for these bonds. (Do not round intermediate calculations. Round your answers to the nearest dollar.) eBook Hint Changes During the Period Ending Bond Liability Balances Period Ended Discount Interest Expense Cash Pald Discount Amortized Discount on Bonds Payable Bonds Payable Carrying Value Start Yr 1 End Yr 2 End Yr 3 End Yr 4 End Yr 5 End Yr 6 End Yr 7 End Yr 8 End Yr 9 End Yr 10 End

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Answer 1

Period Ended	Interest Expense	Cash Paid	Discount Amortized	Bonds Payable	Discount on Bonds Payable	Carrying Value
Start				$       1,50,000	$             9,628	$    1,40,372
Year end
1	$           12,633	$       12,000	$                   633	$       1,50,000	$             8,995	$    1,41,005
2	$           12,690	$       12,000	$                   690	$       1,50,000	$             8,304	$    1,41,696
3	$           12,753	$       12,000	$                   753	$       1,50,000	$             7,551	$    1,42,449
4	$           12,820	$       12,000	$                   820	$       1,50,000	$             6,731	$    1,43,269
5	$           12,894	$       12,000	$                   894	$       1,50,000	$             5,837	$    1,44,163
6	$           12,975	$       12,000	$                   975	$       1,50,000	$             4,862	$    1,45,138
7	$           13,062	$       12,000	$               1,062	$       1,50,000	$             3,800	$    1,46,200
8	$           13,158	$       12,000	$               1,158	$       1,50,000	$             2,642	$    1,47,358
9	$           13,262	$       12,000	$               1,262	$       1,50,000	$             1,379	$    1,48,621
10	$           13,379	$       12,000	$               1,379	$       1,50,000	$                     0	$    1,50,000
Note:
Last year interest expense when calculated is 148621*9% =				$           13,376
For the sake of offsetting the approximation difference
the 10th year-end interest expense is shown as $13,379.