Seymour Group issued $4,000,000 of 15 year 8% stated rate bonds on July 1, 2014 to yield 10%, which is similar to the current market rate for bonds of similar riskiness. The bonds are semi-annual and the first interest payment is December 31, 2014.
Required:
A. Prepare the journal entry for the bond issuance by Seymour on July 1, 2014.
B. Prepare the December 31, 2014 interest payment journal entry for Seymour using the effective interest method.
C. Provide the balance sheet carrying amount and presentation for the bonds on December 31, 2015 by Seymour.