Welch Company issues bonds dated January 1, 2005, with a par value of $250,000. The annual con¬

tract rate on them is 9%, 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 $231,570.

1. What is the amount of the discount 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 10B.1 for these bonds; use the effective in¬

terest method to amortize the discount.