Refer to the information in RE14-7. Thunderball Corporation uses the effective interest method to amortize the premium.
Prepare the journal entry to record the first interest payment.
In RE14-7, On January 1, Thunderball Corporation issues 10%, 5-year bonds with a face value of $275,000 when the effective interest rate is 9%. Interest is to be paid semiannually. Prepare calculations to prove that the selling price of the bonds is $285,880.07.