Recorded the payment of semiannual interest on the bonds issued in (c) and the amortization of the premium for six months. The amortization was determined using the straight-line method.

The information from (c) is Issued $8,000,000 of 10-year, 7% bonds at 110, with interest payable semiannually.

I have the correct titles but I don't know how to get the correct #'s for the accounts

Interest Expense
Premium on Bonds
Cash

my numbers are
n=20 and I=3.5% however my table in my book starts at 5%
8,000,000*.07*.5=280000
280,000/20=14000

I'm unsure if any of those numbers are correct

Quote:

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my numbers are
n=20 and i=3.5% however my table in my book starts at 5%
8,000,000*.07*.5=280000
280,000/20=14000

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It appears to me that you are attempting to do something out of habit rather than understanding when and why it is done. You're trying to jump on those tables when they aren't needed. The problem never gave a market value, and you don't need it. If market was the same 7%, they sell at face value and there's nothing to even do.

It told you how much they were sold for: 110. You just have to recognize that when you see it. It means 110% of the face value. So just figure 110% and you'll have the selling price. Then you'll also have your premium.

It also looks like you're trying to use the 280,000 as the premium. That's the interest payments. You're not amortizing interest payments. You're amortizing the premium.

Issue $8,000,000 of 10yr 7%bonds at 110