Ripkin Company issues 9%, five-year bonds dated January 1, 2020, with a $320,000 par value. The bonds pay interest on June 30 and December 31 and are issued at a price of $332,988. Their annual market rate is 8% on the issue date.

Required

1. Calculate the total bond interest expense over the bonds’ life.

2. Prepare a straight-line amortization table like Exhibit 10.11 for the bonds’ life.

3. Prepare the journal entries to record the first two interest payments.

Exhibit 10.11

Transcribed Image Text:

Semlannual Unamortized Carrying Perlod-End Premlum Value Straight-Line Amortization of Bond Premium (0) 12/31/2020 ... $3,600 $103,600 (1) 6/30/2021 2,700 102,700 (2) 12/31/2021 ... 1,800 101,800 (3) 6/30/2022 900 100,900 During the bond life, carrying value is adjusted to par and the amortized -premium to zero. (4) 12/31/2022 100,000