Effective Interest Amortization

On January $1,$ Eagle, Inc., issued $$800,000$ of $9\%,20-$year bonds for $$878,948,$ yielding an effective interest rate of $8\%.$ Semiannual interest is payable on June $30$ and December $31$ each year. The firm uses the effective interest method to amortize the premium.

Required

a$.$ Prepare an amortization schedule showing the necessary information for the first two interest periods. Round amounts to the nearest dollar.

b$.$ Prepare the journal entry for the bond issuance on January $1.$

c$.$ Prepare the journal entry to record the bond interest payment and premium amortization at June $30.$

d$.$ Prepare the journal entry to record the bond interest payment and premium amortization at December $31.$

a$.$

Year

Interest

Period

Interest

Paid Interest

Expense

Periodic

Amortization

Balance

of Unamortized

Discount Book Value

of Bonds

End of Period

at issue Answer

$0$

Answer

$0$

Answer

$0$

Answer

$0$

Answer

$0$

$11$ Answer

$0$

Answer

$0$

Answer

$0$

Answer

$0$

Answer

$0$

$2$ Answer

$0$

Answer

$0$

Answer

$0$

Answer

$0$

Answer

$0$

General Journal

Date Description Debit Credit

b$.$

Jan$\mathrm{.}1$ Answer

Answer

$0$

Answer

$0$

Answer

Answer

$0$

Answer

$0$

Bonds Payable Answer

$0$

Answer

$0$

To record issuance of bonds.

c$.$

Jun$\mathrm{.}30$ Answer

Answer

$0$

Answer

$0$

Premium on Bonds Payable Answer

$0$

Answer

$0$

Answer

Answer

$0$

Answer

$0$

To record semiannual interest paymentand premium amortization.

d$.$

Dec$\mathrm{.}31$ Answer

Answer

$0$

Answer

$0$

Premium on Bonds Payable Answer

$0$

Answer

$0$

Answer

Answer

$0$

Answer

$0$

To record semiannual interest paymentand premium amortization.