Eric Johnson Inc. issued $500,000 of 8 percent, 15-year bonds payable at a price of 119.6 on May 31, 2020. The market interest rate at the date of issuance was 6 percent, and the Eric Johnson Inc. bonds pay interest semi-annually. The effective-interest amortization table for the bond premium is presented here for the first two

interest periods.

a. How much cash did Eric Johnson Inc. receive upon issuance of the bonds payable?

b. Continue the effective-interest amortization table for the bond premium for the next two interest payments.

c. Record issuance of the bonds on May 31, 2020, and payment of the third semi-annual interest amount and amortization of the bond premium on November 30,2021.

Amortization table B C D E Unamortized End of Premium Premium Account Bond Interest Payment (4% of Maturity Value) Interest Expense (3% of Preceding Bond Carrying Amount) Amortization (A-B) Semi-annual Interest Period May 31, 2020 Nov. 30, 2020 May 31, 2021 Balance (Previous D Carrying Amount - Current C) ($500,000 + D) 98,000 $ 598,000 95,940 595,940 93,818 593,818 S 17,940 $ 20,000 $ 20,000 2,060 2,122 17,878