Chapter 11 - Practice Problems Problem #4 - Bonds sold at Premium A company issued the below bonds on January 1, 2018. Round all answers to two decimal points ($5.95). Face Amount 100,000 12% Contract Rate Semi-annual interest payments years Term of bonds 5 Market Rate Selling Price $ 11% 103,769 1) Prepare the journal entry for the date of issuance. Calculation of premium on bonds payable: DATE ACCOUNTS DR CR 2) Prepare the journal entry for the semi-annual bond interest payment on June 30. Calculation of Cash to be paid to bondholders: Calculation of bond amortization: Step #1: Calculate the total number of interest payments Step #2: Calculate the premium amortization Step #3: Calculate the bond interest expense