Polk Incorporated issued $200,000 of 13% bonds on July 1, 2013, for $206,801.60. The bonds were dated January 1, 2013, pay interest on each June 30 and December 31, are due December 31, 2017, and were issued to yield 12%. Polk uses the effective interest method of amortization.

Required:

Prepare the journal entries to record the issue of the bonds on July 1, 2013, and the interest payments on December 31, 2013, and June 30, 2014. In addition, prepare a bond interest expense and premium amortization schedule for the bonds through June 30, 2014.