Problem 10-3A Straight-Line: Amortization of bond premium LO P1, P3

Hillside issues $2,700,000 of 7%, 15-year bonds dated January 1, 2017, that pay interest semiannually on June 30 and December 31. The bonds are issued at a price of $3,304,790.

Required:

1. Prepare the January 1, 2017, journal entry to record the bonds issuance. 2(a) For each semiannual period, complete the table below to calculate the cash payment. 2(b) For each semiannual period, complete the table below to calculate the straight-line premium amortization. 2(c) For each semiannual period, complete the table below to calculate the bond interest expense. 3. Complete the below table to calculate the total bond interest expense to be recognized over the bonds' life. 4. Prepare the first two years of an amortization table using the straight-line method 5. Prepare the journal entries to record the first two interest payments.

Req 1 Req 2A to 2CReq 3 Req 4 Req 5 Prepare the January 1, 2017, journal entry to record the bonds' issuance. View transaction list Journal entry worksheet Record the issue of bonds with a par value of $2,700,000 cash on January 1, 2017 at an issue price of $3,304,790 Note: Enter debits before credits. Date General Journal Jan 01, 2017 Record entry Clear entry View general journal Req 1 Req 2A to 2C Req 3 Req 4 Req 5 For each semiannual period, complete the table below to calculate the cash payment, straight-line premium amortization and bond interest expense. (Round "Unamortized Premium" to whole dollar and use the rounded value for part 4 & 5.) Par (maturity) value Semiannual cash interest payment Annual Rate Year Par (maturity value Premium on Bonds Payable Straight-line premium amortization Bond price Semiannual periods Semiannual cash payment Premium amortization Bond interest expense Req Req 2A to 2C Req 3 Req 4 Req 5 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 Req Req 2A to 2C Req 4 Req 5 Prepare the first two years of an amortization table using the straight-line method Semiannual Period- Unamortized Carrying Value End 01/01/2017 06/30/2017 12/31/2017 06/30/2018 12/31/2018 Premium Req 1 Req 2A to 2CReq 3 Req 4 Req 5 Prepare the journal entries to record the first two interest payments. View transaction list Journal entry worksheet 2 Record the first interest payment on June 30, 2017. Note: Enter debits before credits. Cats General Journal DabCedil Jun 30, 2017 Record entry Clear entry View general journal Journal entry worksheet 2 Record the second interest payment on December 31, 2017. Note: Enter debits before credits Date General Journal Debit Credit Dec 31, 2017 Record entry Clear entry View general journal