Answer:
$54.17 per bond
Explanation:
the journal entry to record the issuance of the bond:
Dr Cash 1,100
Cr Bonds payable 1,000
Cr Premium on bonds payable 100
The bond premium amortization using straight line amortization:
$100 / 30 = $3.33 per coupon payment
journal entry to record coupon payment:
Dr Interest expense 41.67
Dr Premium on bonds payable 3.33
Cr Cash 45
the yearly interest expense = $41.67 x 2 = $83.34 x (1 - tax rate) = $83.34 x 0.65 = $54.17
