Ike issues $120,000 of 11%, three-year bonds dated January 1, 2017, that pay interest semiannually on June 30 and December 31. They are issued at $123,044. Their market rate is 10% at the issue date.

Record the issue of bonds with a par value of $120,000 cash on January 1, 2017 at an issue price of $123,044.

Date	General Journal	Debit	Credit
Jan 01, 2017

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

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

Prepare an effective interest amortization table for the bonds' first two years.

Semiannual Interest Period-End	Cash Interest Paid	Bond Interest Expense	Premium Amortization	Unamortized Premium	Carrying Value
01/01/2017
06/30/2017
12/31/2017
06/30/2018
12/31/2018

Record the first interest payment on June 30, 2017.

Date	General Journal	Debit	Credit
Jun 30, 2017

Record the second interest payment on December 31, 2017.

Date	General Journal	Debit	Credit
Dec 31, 2017

Record the retirement of the bonds on January 1, 2019 at 98.

Date	General Journal	Debit	Credit
Jan 01, 2019