Quatro Co. issues bonds dated January 1, 2020, with a par value of $400,000. The bonds annual

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Quatro Co. issues bonds dated January 1, 2020, with a par value of $400,000. The bonds’ annual contract rate is 13%, 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 $409,850. 

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 a straight-line amortization table like Exhibit 10.11 for these bonds.

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