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Problem 10-3A Straight-Line: Amortization of bond premium LO P3 Ellis Company issues 8.0%, five-year bonds dated January 1, 2019, with a $600,000 par value. The bonds pay interest on June 30 and December 31 and are issued at a price of $651,181. The annual market rate is 6% on the issue date. Required: 1. Complete the below table to calculate the total bond interest expense over the bonds' life. 2. Prepare a straight-line amortization table for the bonds' life. 3. Prepare the journal entries to record the first two interest payments.

Problem 10-3A Straight-Line: Amortization of bond premium LO P3 Ellis Company issues 8.0%, five-year bonds dated January 1, 2019, with a $600,000 par value. The bonds pay interest on June 30 and December 31 and are issued at a price of $651,181. The annual market rate is 6% on the issue date. Required: 1. Complete the below table to calculate the total bond interest expense over the bonds' life. 2. Prepare a straight-line amortization table for the bonds' life. 3. Prepare the journal entries to record the first two interest payments.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Problem 10-3A Straight-Line: Amortization of bond premium LO P3 Ellis Company issues 8.0%, five-year bonds dated January 1, 2019, with a $600,000 par value. The bonds pay interest on June 30 and December 31 and are issued at a price of $651,181. The annual market rate is 6% on the issue date. Required: 1. Complete the below table to calculate the total bond interest expense over the bonds' life. 2. Prepare a straight-line amortization table for the bonds' life. 3. Prepare the journal entries to record the first two interest payments.
Transcribed Image Text:Problem 10-3A Straight-Line: Amortization of bond premium LO P3 Ellis Company issues 8.0%, five-year bonds dated January 1, 2019, with a $600,000 par value. The bonds pay interest on June 30 and December 31 and are issued at a price of $651,181. The annual market rate is 6% on the issue date. Required: 1. Complete the below table to calculate the total bond interest expense over the bonds' life. 2. Prepare a straight-line amortization table for the bonds' life. 3. Prepare the journal entries to record the first two interest payments.
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