Ellis Company issues 9.0%, five-year bonds dated January 1, 2019, with a $480,000 par value. The bonds pay interest on June 30 and December 31 and are issued at a price of $499,483. The annual market rate is 8% on the issue date. Required: 1. Compute the total bond interest expense over the bonds' life. 2. Prepare an effective interest amortization table for the bonds life. 3. Prepare the journal entries to record the first two interest payments.

1.

Compute the total bond interest expense over the bonds' life.

Total bond interest expense over life of bonds:
Amount repaid:
	payments of
Par value at maturity
Total repaid			0
Less amount borrowed
Total bond interest expense			$0

2.

Prepare an effective interest amortization table for the bonds life.

Semiannual Period-End	Cash Interest Paid	Bond Interest Expense	Premium Amortization	Unamortized Premium	Carrying Value
01/01/2019
06/30/2019
12/31/2019
06/30/2020
12/31/2020
06/30/2021
12/31/2021
06/30/2022
12/31/2022
06/30/2023
12/31/2023
Total

3.

Prepare the journal entries to record the first two interest payments.

Journal entry worksheet

Note: Enter debits before credits.

Date	General Journal	Debit	Credit
Jun 30, 2019

Date	General Journal	Debit	Credit
Dec 31, 2019