Refer to the bond details in Problem 10-2A,

Hillside issues $4,000,000 of 6%, 15-year bonds dated January 1, 2016, that pay interest semiannually on June 30 and December 31. The bonds are issued at a price of $3,456,448.

Except assume that the bonds are issued at a price of $4,895,980?

Required

1. Prepare the January 1, 2016, journal entry to record the bonds' issuance.

2. For each semiannual period, compute

(a) The cash payment,

(b) The straight-line premium amortization, and

(c) The bond interest expense.

3. Determine the total bond interest expense to be recognized over the bonds' life.

4. Prepare the first two years of an amortization table like Exhibit 10.11 using the straight-line method.

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

Exhibit 10.11

Semiannual Unamortized Carrying Valuet Period-End Premium* (0) 12/31/2016 .... (1) 6/30/2017 ... $103,546 $3,546 2,659 102,659 (2) 12/31/2017 1,772 101,772 (3) 6/30/2018 ... 885 100,885 (4) 12/31/2018 ...... 10,000