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