Quatro Co. issues bonds dated January 1, 2019, with a par valueof $710,000. The bonds’ annual contract rate is 9%, and interest ispaid semiannually on June 30 and December 31. The bonds mature inthree years. The annual market rate at the date of issuance is 8%,and the bonds are sold for $728,598.
1. What is the amount of the premium on thesebonds at issuance?
2. How much total bond interest expense will berecognized over the life of these bonds?
3. Prepare an effective interest amortizationtable for these bonds.
- Required 1
- Required 2
- Required 3
What is the amount of the premium on these bonds atissuance?
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| | Total Bond Interest Expense Over theLife of the Bonds: | | Amount repaid: | | payments of | | | | Par value at maturity | | | Total repaid | | | Less amount borrowed | | | Total bond interestexpense |
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repare an effective interest amortization table for these bonds.(Round all amounts to the nearest whole dollar.)
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| | Semiannual Interest Period-End | Cash Interest Paid | Bond Interest Expense | Premium Amortization | Unamortized Premium | Carrying Value | | 01/01/2019 | | | | | 06/30/2019 | | | | | | | 12/31/2019 | | | | | | | 06/30/2020 | | | | | | | 12/31/2020 | | | | | | | 06/30/2021 | | | | | | | 12/31/2021 | | | | | | | Total | | | | |
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