Stanford issues bonds dated January 1, 2017, with a par value of $251,000. The bonds annual contract rate is 10%, 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 $238,667

. 1. What is the amount of the discount 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 using the effective interest method to amortize the discount for these bonds.

• Required 3

Prepare an amortization table using the effective interest method to amortize the discount for these bonds. (Round all amounts to the nearest whole dollar.)

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

What is the amount of the discount on these bonds at issuance?

Discount

$12,333

Total Bond Interest Expense Over Life of Bonds:
Amount repaid:
6	payments of	$12,550	$75,300
Par value at maturity			251,000
Total repaid			326,300
Less amount borrowed			238,667
Total bond interest expense			$87,633

Semiannual Interest Period-End	Cash Interest Paid	Bond Interest Expense	Discount Amortization	Unamortized Discount	Carrying Value
01/01/2017				$12,333	$238,667
06/30/2017	$12,550
12/31/2017	12,550
06/30/2018	12,550
12/31/2018	12,550
06/30/2019	12,550
12/31/2019	12,550	12,550	0
Total	$75,300	$87,633	$12,333