Chapter 11 - Practice Problems Problem #2 - Bonds sold at Premium A company issued the below bonds on January 1, 2018. Round all answers to two decimal points ($5.95). $ Face Amount Contract Rate 2,680,000 4% Semi-annual interest payments 20 years Term of bonds Market Rate Selling Price 2.5% 3,150,000 $ 1) Prepare the journal entry for the date of issuance. Calculation of premium on bonds payable: Date Accounts Dr Cr 2) Prepare the journal entry for the semi-annual bond interest payment on June 30. Calculation of Cash to be paid to bondholders: Calculation of bond amortization: Step #1: Calculate the total number of interest payments Step #2: Calculate the premium amortization Step #3: Calculate the bond interest expense Date Accounts Dr Cr