Prairie Dunes Company issues bonds dated January 1, 2004, with a par value of $800,000. The anStraight-line amortization of nual contract rate is 13%, and interest is paid semiannually on June 30 and December 31. The bonds bond premium mature in three years. The annual market rate at the date of issuance is 12%, and the bonds are sold P3 for $819,700.

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 like the one in Exhibit 10.11 for these bonds; use the straight-line method to amortize the premium.