Stanford issues bonds dated January 1, 2015, with a par value of $256,000. 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 12%, and the bonds are sold for $243,421.

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

2. How much total bond interest expense will be recognized over the life of these bonds?

Prepare an Amortization table using the effective interest method to amortize the discount for these bonds. (Round all amounts to the nearest whole dollar.)

Total Bond Interest Expense Over Life of Bonds: Amount repaid: payments of 12,800 76,800 6 payments of12,800$76,800 256,000 332,800 243,421 89,379 Par value at maturity Total repaid Less amount borrowed Total bond interest expense