Presented below is the partial bond premium amortization schedule for Gomez Corp. Gomez uses the effective-interest method of amortization.

(a) Prepare the journal entry to record the payment of interest and the premium amortization at the end of the first two periods.
(b) Explain why interest expense is less than interest paid.
(c) Explain why interest expense will decrease each period.

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Bond Amortized Cost $108,530 107,786 107,020 Interest Periods Interest Payment Interest Premium Amortization Expense Issue date $4,000 4,000 $3,256 3,234 $744 766