On July 1,2010,Garden Works,Inc.issued $300,000 of ten-year,7% bonds for $303,000.The bonds were dated July 1,2010,and semi-annual interest will be paid each December 31 and June 30.Garden Works Inc.uses the straight-line method of amortization.How much is the semi-annual interest expense?

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The straight-line premium amortization ($150) = Premium on bonds payable ($303,000 - $300,000) F1F1F1S1F1F1F10 20 semi-annual interest payments.Semi-annual interest expense ($10,350) = Semi-annual cash payment ($300,000 F1F1F1S1F1F1F10 .07 F1F1F1S1F1F1F10 6/12) - Discount on bonds payable amortization ($150).