Question - On January 1 of this year, Houston Company issued a bond with a face value of $15,500 and a coupon rate of 7 percent. The bond matures in 3 years and pays interest every December 31. When the bond was issued, the annual market rate of interest was 6 percent. Houston uses the effective-interest amortization method. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided. Round your final answer to whole dollars.)
Required:
1. Complete a bond amortization schedule for all three years of the bond's life.
2. What amounts will be reported on the income statement and balance sheet at the end of Year 1 and Year 2?