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Straight Line vs Effective Interest Amortization Methods Ranger Co. issues bonds dated January 1, information about the bonds is below. Interest is paid semiannually on June 30 and December 31. Par 850,000 Rate 12% Term 3 Market Rate 10% Issue Price 893,131 Semi annual interest 51,000 1. What is the amount of the premium on these bonds at issuance? Issue Price Par premium premium amoritized per period 2. How much total bond interest expense will be recognized over the life of these bonds? Total Bond Interest Expense Over Life of Bonds: Amount repaid: payments of Par value at maturity Total repaid Less amount borrowed Total bond interest expense 3. Prepare a straight-line amortization table for these bonds. Semiannual Interest Unamortized Carrying Period-End Premium Value 1/1 vr 1 6/30 vr 1 1/1 vr 2 6/30 vr 2 1/1/ vr 3 6/30 vr 3 12/31 yr 3 3. Prepare an effective Interest: amortization of these bonds. Semiannua I Interest Cash Interest Bond Interest Premium Unamoritzed Carrying Period-End Paid Expense Amorization Premium Value 1/1 yr 1 6/30 vr 1 1/1 vr 2 6/30 vr 2 1/1/ vr 3 6/30 vr 3 12/31 vr 3 Total O