On January 1, 2007 the Calvert Company issues 12% , $100,000 facevalue bonds for $103,545.91, a price to yield 10%. The bondsmature January 1, 2009. Interest is paid semiannually on June30 and December 31.
Required
- Prepare a bond interest expense and premium ammorization scheduleusing the straight-line method.
- Prepare the journal entries to record the interest payments onJunne 30, 2007 and December 31, 2007, using both methods.