Quatro Co. issues bonds dated January 1, 2015, with a par value of $820,000. The bonds annual contract rate is 10%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuance is 8%, and the bonds are sold for $862,972.

Exercise 14-14B Effective Interest: Amortization of bond premium LO P6 Quatro Co. issues bonds dated January 1, 2015, with a par value of $820,000. The bonds' annual contract rate is 10%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuance is 8%, and the bonds are sold for $862,972 1. What is the amount of the premium on these bonds at issuance? remium S 42,972 2. How much total bond interest expense will be recognized over the life of these bonds? Total Bond Interest Expense Over the Life of the Bonds Amount repaid 1,000 246,000 820,000 1,066,000 862,972 $ 203,028 6 payments of Par value at maturity Total repaid Less amount borrowed Total bond interest expense 3. Prepare an amortization table for these bonds using the effective interest method to amortize the premium. (Round all amounts to the nearest whole dollar.) Semiannual Interest Period-End Cash Interest Bond Interest Premium Unamortized Carrying Value Paid Expense Amortization Premiumm 01/01/2013 06/30/2013 12/31/2013 06/30/2014 12/31/2014 06/30/2015 12/31/2015 41,000 41,000 41,000 41,000 41,000 41,000 41,000 $ 246,000$ 246,000 Total