(D) (E) Bonds: $100,000 Par Value, Semiannual Interest Payments, Two-Year Life, 6% Semiannual Contract Rate, 4.9851% Semiannual Market Rate (A) (B) (C) Cash Bond Semiannual Interest Interest Premium Unamortized Interest Paid Expense Amortization Premium Period-End 6% x $100,000 4.9851% x Prior () (A) (B) Prior (D)-(C) 12/31/2019 $3,600 6/30/2020 $ 6,000 $5,165 $ 835 2,765 12/31/2020 6,000 5,123 877 1,888 6/30/2021 6,000 5,079 921 967 12/31/2021 6,000 5,033 967 $24,000 $20,400 $3,600 (0) (1) (2) (3) (4) Carrying Value $100,000+ (D) $103,600 102,765 101,888 100,967 100,000 0 Column (A) is the par value ($100,000) multiplied by the semiannual contract rate (6%). Column (B) is the prior period's carrying value multiplied by the semiannual market rate (4.9851%). Column (C) is the difference between interest paid and bond interest expense, or ((A)-(B)). Column (D) is the prior period's unamortized premium less the current period's premium amortization. Column (E) is the par value plus unamortized premium, or ($100,000 + (D)]. Problem 14-10AB Effective Interest: Amortization of bond P60 Ike issues $180,000 of 11%, three-year bonds dated January 1, 2019, that pay interest semiannually on June 30 and December 31. They are issued at $184,566 when the market rate is 10%. Required 1. Prepare the January 1 journal entry to record the bonds' issuance. 2. Determine the total bond interest expense to be recognized over the bonds' life. 3. Prepare an effective interest amortization table like Exhibit 14B.2 for the bonds' first two years. Check (3) 6/30/2020 carrying value, $182,448 4. Prepare the journal entries to record the first two interest payments. (D) (E) Bonds: $100,000 Par Value, Semiannual Interest Payments, Two-Year Life, 6% Semiannual Contract Rate, 4.9851% Semiannual Market Rate (A) (B) (C) Cash Bond Semiannual Interest Interest Premium Unamortized Interest Paid Expense Amortization Premium Period-End 6% x $100,000 4.9851% x Prior () (A) (B) Prior (D)-(C) 12/31/2019 $3,600 6/30/2020 $ 6,000 $5,165 $ 835 2,765 12/31/2020 6,000 5,123 877 1,888 6/30/2021 6,000 5,079 921 967 12/31/2021 6,000 5,033 967 $24,000 $20,400 $3,600 (0) (1) (2) (3) (4) Carrying Value $100,000+ (D) $103,600 102,765 101,888 100,967 100,000 0 Column (A) is the par value ($100,000) multiplied by the semiannual contract rate (6%). Column (B) is the prior period's carrying value multiplied by the semiannual market rate (4.9851%). Column (C) is the difference between interest paid and bond interest expense, or ((A)-(B)). Column (D) is the prior period's unamortized premium less the current period's premium amortization. Column (E) is the par value plus unamortized premium, or ($100,000 + (D)]. Problem 14-10AB Effective Interest: Amortization of bond P60 Ike issues $180,000 of 11%, three-year bonds dated January 1, 2019, that pay interest semiannually on June 30 and December 31. They are issued at $184,566 when the market rate is 10%. Required 1. Prepare the January 1 journal entry to record the bonds' issuance. 2. Determine the total bond interest expense to be recognized over the bonds' life. 3. Prepare an effective interest amortization table like Exhibit 14B.2 for the bonds' first two years. Check (3) 6/30/2020 carrying value, $182,448 4. Prepare the journal entries to record the first two interest payments