On May 1, 2023, Ezzy Company issued a six-year bond worth $400,000 with an interest rate of 8% per annum. Interest is to be paid semi-annually on October 31 and April 30. At the time of the issuance, the market interest rate was 6%. Ezzy Company amortizes any premium or discount using the effective-interest method.

Show the calculation for each of the amounts on the entries.

Dec 31 Dr Interest Expense 4,370 Dr Premium on Bonds Payable 963 Cr Interest Payable 5,333

2024 Apr 30 Dr Interest Expense 8,741 8,741 Dr Premium on Bonds Payable 1,926 1,926 Dr Interest Payable 5,333 Cr Cash 16,000

2028 May 1 Bonds Payable 400,000 Premium on Bonds Payable 7,666 Credit- Gain on Bond Redemption 1,666 Credit- Cash 406,000 To redeem bond

May 1 Bonds Payable 400,000 Premium on Bonds Payable 7,666 Loss on Bond Redemption 2,334 Credit- Cash 410,000