Quatro Co. issues bonds dated January 1, 2016, with a par value of $870,000. The bonds annual contract rate is 9%, 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 $892,789.

1. What is the amount of the premium on these bonds at issuance?

Premium

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			0
Less amount borrowed
Total bond interest expense			$0

3. Prepare an amortization table for these bonds; use the straight-line method to amortize the premium. (Round your intermediate calculations to the nearest dollar amount.)

Semiannual Period-End	Unamortized Premium	Carrying Value
01/01/2016
06/30/2016
12/31/2016
06/30/2017
12/31/2017
06/30/2018		0
12/31/2018