Renfro Company issued $500,000 of 8%, 10-year bonds at 102. Interest is paid annually, and the straight-line method is used for amortization. Assume that the market rate for similar investments is 7%. The bonds are issued on the date of the bonds. (SHOW ALL WORK)
What amount was received for the bonds?
How much interest is paid each interest period?
What is the premium amortization for the first interest period?
How much bond interest expense is recorded on the first interest date?
What is the carrying value of the bonds after the first interest date?