wookie company issues 6%, five-year bonds, on january 1 of this year, with a par value of $107,000 and semiannual interest payments. semiannual period-end unamortized premium carrying value (0) january 1, issuance $ 8,251 $ 115,251 (1) june 30, first payment 7,426 114,426 (2) december 31, second payment 6,601 113,601 use the above straight-line bond amortization table and prepare journal entries for the following. (a) the issuance of bonds on january 1. (b) the first interest payment on june 30. (c) the second interest payment on december 31.

If the bond's purchasing price exceeds its face value, a taxpayer must pay a premium. The premium is the discrepancy between the face value and the purchasing price. Taxpayers who pay premiums for bonds may, and in certain situations, are required to, amortize those premiums.

Date General Journal Debit Credit

01-jan cash $115,251

Premium on bonds payable $8,251

Bonds payable $107,000

(to record issuance)

30-jun Internet expense $2,385

Premium on Bonds payable

($8251-7426) $825

Cash ($107000*6%*6/12) $3210

(to record #1 interest)

31-Dec Interest Expense $2385

Premium Bonds payable

($7426-6601) $825

Cash($107000*6%*6/12) $3210

(to record #2 interest)

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