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On January 1, 2019, Learned Inc, issued $13 million face amount of 20-year, 14% stated rate bonds when market interest rates were 16%. The bonds pay interest semiannually each June 30 and December 31 and mature on December 31, 2038. Table 6-4, Table 6-5 (Use appropriate factor from the table provided.)

b-2. Assume instead that the proceeds were $13,363,000. Record the journal entry to show the payment of semiannual interest and the related premium amortization on June 30, 2019, assuming that the premium of $363,000 is amortized on a straight-line basis. (Enter your answers in dollars, rather than in millions of dollars. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Answer 1

Price of bond	Coupon amount*PVA(i=8%,n=40) + Par value*PV(i=8%,n=40)
Price of bond	(13000000*7%)*11.9246 + (13000000*0.0460)
Price of bond	(91000*11.9246)+(13000000*0.0460)
Price of bond	10851386+598000
Price of bond	$11,449,386
Thus, issue price of bond is $11,449,386
Record journal entry for interest amortized
Date	General Journal	Debit	Credit
30-Jun-19	Interest expense (910000-9075)	$900,925
	Premium on bonds payable (363000/40)	$9,075
	Cash (13000000*7%)		$910,000
	(To record semi-annual interest expense)