Premium Amortization On the first day of the fiscal year, a company issues a $2,500,000,...
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Premium Amortization On the first day of the fiscal year, a company issues a $2,500,000, 11%, 5-year bond that pays semiannual interest of $137,500 ($2,500,000 x 11% * V), receiving cash of $2,804,159. Journalize the first interest payment and the amortization of the related bond premium. Round to the nearest dottar. If an amount box does not require an entry, leave it blank. Interest Expense 107,085 X Premium on Bonds Payable 30,415 X Cash 137,500 Feedback Check My Work Bonds Payable is always recorded at face value. Any difference in issue price is reflected in a premium or discount account. The straight line method of amortization provides equal amounts of amortization over the life of the bond
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