Refer to the bond details in Exercise 10-4 and prepare an amortization table like the one in Exhibit 10B.2 for these bonds using the effective interest method to amortize the premium.

see Exercise 10-4

Quatro Co. issues bonds dated January 1, 2013, with a par value of $400,000. The bonds' annual contract rate is 13%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuance is 12%, and the bonds are sold for $409,850.

1. What is the amount of thepremium on these bonds at issuance?

2. How much total bond interest expense will be recognized over the life of these bonds?

3. Prepare an amortization table like the one in Exhibit 10.11 for these bonds; use the straight-line method to amortize the premium.