Problem

Preparing a Debt Payment Schedule with Effective-Interest Method of Amortization and Deter...

Preparing a Debt Payment Schedule with Effective-Interest Method of Amortization and Determining Reported Amounts

Houston Company issued a $10.000. three-year. 5 percent bond on January 1,2011. The bond interest is paid each December 31. The bond was sold to yield 4 percent.

Required:

1. Complete a bond amortization schedule. Use the effective-interest method.

2. What amounts will be reported on the income statement and balance sheet at the end of 2011. 2012. and 2013?

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