On January 1, when the market interest rate was 8 percent, Seton Corporation com

Question

On January 1, when the market interest rate was 8 percent, Seton Corporation completed a $100,000, 7 percent bond issue for $93,291. The bonds pay interest each December 31 and mature in 10 years. Assume Seton Corporation uses the effective-interest method to amortize the bond discount.

Required 1.&2. Complete the required journal entries to record the bond issuance and the first interest payment on December 31. (lf no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Round your answers to the nearest whole dollar.) View transaction list Journal entry worksheet 2 Record the issuance of bonds for $93,291 with a face value of $100,000. Note: Enter debits before credits. Date General Journal Debit Credit January 01 Record entry Clear entry View general journal

Explanation / Answer

1-Jan Cash 93291 Discount on Bonds Payable 6709        Bonds Payable 100000 31-Dec Interest expense 7463 =93291*8%         Discount on Bonds Payable 463         Cash 7000 =100000*7%

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