Question: Ellis issues 6.5%, five-year bonds dated January 1, 2015, with a $250,000 par value. The bonds pay interest on June 30 and December 31 and

Ellis issues 6.5%, five-year bonds dated January 1, 2015, with a $250,000 par value. The bonds pay interest on June 30 and December 31 and are issued at a price of $255,333. The annual market rate is 6% on the issue date.

Required

1. Calculate the total bond interest expense over the bonds’ life.

2. Prepare a straight-line amortization table like Exhibit for the bonds’ life.

3. Prepare the journal entries to record the first two interest payments.

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Part 1 Ten payments of 8125 81250 Par value at maturity 250000 Total repaid 331250 Less amo... View full answer

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