Problem 10-5A Straight-Line: Amortization of bond premium and discount LO P1, P2, P3 ...
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Accounting
Problem 10-5A Straight-Line: Amortization of bond premium and discount LO P1, P2, P3
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Legacy issues $630,000 of 9.0%, four-year bonds dated January 1, 2017, that pay interest semiannually on June 30 and December 31. They are issued at $571,310 and their market rate is 12% at the issue date.
Problem 10-5A Part 1
Required:
1. Prepare the January 1, 2017, journal entry to record the bonds' issuance.
2. Determine the total bond interest expense to be recognized over the bonds' life. 
3. Prepare a straight-line amortization table for the bonds' first two years.
4. Prepare the journal entries to record the first two interest payments.
Total bond interest expense over life of bonds: Amount repaid payments of Par value at maturity Total repaid Less amount borrowed Total bond interest expense
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