(Answered) Effective interest premium amortizationpolk incorporated

Accounting

Effective Interest Premium Amortization

Polk Incorporated issued $500,000 of 13% bonds on July 1, 2013, for $517,003.99. The bonds were dated January 1, 2013, pay interest on each June 30 and December 31, are due December 31, 2017, and were issued to yield 12%. Polk uses the effective interest method of amortization.

1. Prepare the journal entries to record the issue of the bonds on July 1, 2013, and the interest payments on December 31, 2013, and June 30, 2014. If an amount box does not require an entry, leave it blank. Round your answers to two decimal places, if necessary.

2. In addition, prepare a bond interest expense and premium amortization schedule for the bonds through June 30, 2014.

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