Question

Need help with the remaining blanks on #3.

6 months of bond interest payments, 6 months of premium armortization, and 6 months of unarmortized premium. Plus the last two carrying value for months 6/30 and 12/31. Thank you!

Check my work 4 Quatro Co issues bonds dated January 1.2017, with a par value of $800000. The bonds' annual contract rate is 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 12%, and the bonds are sold for S819700. 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? 3. Prepare an amortization table for these bonds using the effective interest method to amortize the premium. its eBook Complete this question by entering your answers in the tabs below. Hint Required 1 Required 2 Required 3 What is the amount of the premium on these bonds at issuance? Print 19.700 eferences Required 2 >

Answer 1

Ans.	Amortisation table for bonds using the effective interest method:
	Semiannual interest Period End		Cash Int. Paid	Bond Interest Expense		Premium Amortisation	Unamortisation Premium	Carrying Value
	01.01.2017						19,700	819,700
	06.30.2017		52,000	49,182.00		(2,818.00)	16,882.00	816,882.00
	12.31.2017		52,000	49,012.92		(2,987.08)	13,894.92	813,894.92
	06.30.2018		52,000	48,833.70		(3,166.30)	10,728.62	810,728.62
	31.12.2018		52,000	48,643.72		(3,356.28)	7,372.33	807,372.33
	06.30.2019		52,000	48,442.34		(3,557.66)	3,814.67	803,814.67
	31.12.2019		52,000	48,228.88		(3,771.12)	43.55	800,043.55
	Total		312,000	292,344		(19,656)