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Quatro Co. issues bonds dated January 1, 2015, with a par value of $730,000. The...

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Accounting

Quatro Co. issues bonds dated January 1, 2015, with a par value of $730,000. The bonds annual contract rate is 12%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuance is 10%, and the bonds are sold for $767,042.

1. What is the amount of the premium on these bonds at issuance?

2. How much total bond interest expense will be recognized over the life of these bonds?

Amount repaid:

_______ payments of________

Par value maturity_________

total repaid 0

Less amount borrowed _______

Total bond interest expense $______

3. Prepare an amortization table for these bonds using the effective interest method to amortize the premium. (Enter all amounts positive values. Round all amounts to the nearest whole dollar.)

Semiannual Interest Period-End Cash Interest Paid Bond Interest Expense Premium Amortization Unamortized Premium Carrying Value
01/01/2013
06/30/2013
12/31/2013
06/30/2014
12/31/2014
06/30/2015
12/31/2015
Total

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