Assuming Wagoner issued the bond for $215,970, the amount of interest expense appearing on the 2015 income statement would be:

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$215,970 x 8% = $17, 278 interest expense in 2013; $200,000 x 10% = $20,000 interest payment; $20,000 - $17,278 = $2,722 amortization in 2013; $215,970 - $2,722 = $213,248 carrying value on 12/31/13; $213,248 x 8% = $17,060 interest expense in 2014; $20,000 - $17,060 = $2,940 amortization in 2014; $213,248 - $2,940 = $210,308 carrying value on 12/31/14; $210,308 x 8% = $16,825 interest expense in 2015

Assuming Wagoner Issued the Bond for $215,970, the Amount of Interest