Hillside issues $2,300,000 of 8%, 15-year bonds dated January 1, 2015, that pay interest semiannually on June 30 and December 31. The bonds are issued at a price of $2,815,190.

1. Prepare the January 1, 2015, journal entry to record the bonds' issuance.

2a. For each semiannual period, complete the table below to calculate the cash payment.

2b. For each semiannual period, complete the table below to calculate the straight-line premium amortization. (Round Unamortized Premium to whole dollar and use the rounded value for part 4 & 5).

2c. For each semiannual period, complete the table below to calculate the bond interest expense.

3. Complete the table below to calculate the total bond interest expense to be recognized over the bonds' life.

4. Prepare the first two years of amortization table using the straight-line method.

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

(INFO ATTACHED)

Bond issue entry: 1 Date Account Title Debit Credit 1-Jan-15 Cash 2,815,190 Bonds Payable 2,300,000 Premium on Bonds Payable 515,190 2(a) Par Value 2,300,000 x Annual Rate 8% Year / 2 Semi annual cash interest payment 92000 2(b) Bond Price 2,815,190 minus (-) Par Premium on Bonds 2,300,000 515,190 / Semiannual Straight line premium amortization 30 17173 2C Semi Annual cash payment 92000 minus (-) Premium Amor Bond Interest Expense 17173 74827 3 Total Bond Interest expense over life of bonds: Amount Repaid 30 Payments of Par value at maturity Total Repaid Less: Amount borrowed Total Bond Interest expenses 92000 2760000 2,300,000 5,060,000 2,815,190 2,244,810 4 First two year of amortization table: Semi annual Unamortized Premium Carrying value 1/1/2015 515,190 2,815,190 6/30/2015 498,017 2,798,017 12/31/2015 480,844 2,780,844 6/30/2016 463,671 2,763,671 12/31/2016 446,498 2,746,498 5 Journal Entry to record first two payment: Date Jun 30 15 General Journal Debit Credit Interest Expense 74827 Premium on Bonds Payable 17173 Cash 92000 31-Dec-15 Interest Expense Premium on Bonds Payable Cash 74827 17173 92000