Problem 10-9AB Effective Interest: Amortization of bond premium; computing bond price LO P1, P6

Ellis issues 8.0%, five-year bonds dated January 1, 2018, with a $430,000 par value. The bonds pay interest on June 30 and December 31 and are issued at a price of $466,682. The annual market rate is 6% on the issue date. (Table B.1, Table B.2, Table B.3, and Table B.4) (Use appropriate factor(s) from the tables provided.)

Required:

1. Compute the total bond interest expense over the bonds' life.

2. Prepare an effective interest amortization table for the bonds life.

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

4. Use the market rate at issuance to compute the present value of the remaining cash flows for these bonds as of December 31, 2020.

Prepare an effective interest amortization table for the bonds' life. Semiannual Interest Cash Interest Bond Interest Period-End Paid Expense Premium Amortization Unamortizede Carrying Value Premium 01/01/2018 06/30/2018 12/31/2018 06/30/2019 12/31/2019 06/30/2020 12/31/2020 06/30/2021 12/31/2021 06/30/2022 12/31/2022 Total Complete this question by entering your answers in the ta Required 1 Required 2 Required 3 Required 4 Compute the total bond interest expense over the bonds' life. $ Total bond interest expense over life of bonds: Amount repaid: 10 payments of $ 135,318 Par value at maturity Total repaid Less amount borrowed Total bond interest expense 1,353,180 430,000 1,783,180 $ 1,783,180 Required 1