Amortization of Premium Ortega Company issued five-year, 5% bonds with a face value of $50,000 on January 1, 2017. Interest is paid annually on December 31. The market rate of interest of January 1, 2017, is 4% and the proceeds from the bond issuance equal $52,227. Required:

1. Prepare a five-year table to amortize the premium using the effective interest method. Enter all amounts as positive numbers. Round all amounts to the nearest whole dollar. *Note: Due to rounding you will have to adjust the interest expense for 12/31/21 so the carrying value equals $50,000.

2. What is the total interest expense over the life of the bonds? cash interest payment? premium amortization?

3. Identify and analyze the effect of the payment of interest on December 31, 2019 (the third year).

Prepare the balance sheet presentation of the bonds on December 31, 2019 (the third year)