In: Accounting
Ellis Company issues 8.0%, five-year bonds dated January 1,
2019, with a $600,000 par value. The bonds pay interest on June 30
and December 31 and are issued at a price of $651,181. The annual
market rate is 6% on the issue date.
Required:
1. Complete the below table to calculate the total
bond interest expense over the bonds' life.
2. Prepare a straight-line amortization table for
the bonds’ life.
3. Prepare the journal entries to record the first
two interest payments.