Oak Branch Inc. issued $760,000 of 9%, 10-year bonds when the market rate was 8%. They received $811,656. Interest was paid semi-annually. The following table shows the amortization table for the first three years of the bonds:Carrying Value = Face value + Premium on bondsJan. 1, Year 1:Cash Interest payment = Carrying value x Coupon rate / 2= $836,000 × 9% / 2 = $37,620Interest on Carrying Value = Carrying value x Market rate / 2= $836,000 × 8% / 2 = $33,440Amortization of Premium = Cash interest payment – Interest on carrying value= $37,620 – $33,440 = $4,180Carrying Value = Carrying value – Amortization of premium= $836,000 – $4,180 = $831,820June 30, Year 1:Cash Interest payment = Carrying value x Coupon rate / 2= $831,820 × 9% / 2 = $37,430Interest on Carrying Value = Carrying value x Market rate / 2= $831,820 × 8% / 2 = $33,272Amortization of Premium = Cash interest payment – Interest on carrying value= $37,430 – $33,272 = $4,158Carrying Value = Carrying value – Amortization of premium= $831,820 – $4,158 = $827,662Dec. 31, Year 1:Cash Interest payment = Carrying value x Coupon rate / 2= $827,662 × 9% / 2 = $37,244Interest on Carrying Value = Carrying value x Market rate / 2= $827,662 × 8% / 2 = $33,106Amortization of Premium = Cash interest payment – Interest on carrying value= $37,244 – $33,106 = $4,138Carrying Value = Carrying value – Amortization of premium= $827,662 – $4,138 = $823,524June 30, Year 2:Cash Interest payment = Carrying value x Coupon rate / 2= $823,524 × 9% / 2 = $37,057Interest on Carrying Value = Carrying value x Market rate / 2= $823,524 × 8% / 2 = $32,941Amortization of Premium = Cash interest payment – Interest on carrying value= $37,057 – $32,941 = $4,116Carrying Value = Carrying value – Amortization of premium= $823,524 – $4,116 = $819,408Dec. 31, Year 2:Cash Interest payment = Carrying value x Coupon rate / 2= $819,408 × 9% / 2 = $36,869Interest on Carrying Value = Carrying value x Market rate / 2= $819,408 × 8% / 2 = $32,776Amortization of Premium = Cash interest payment – Interest on carrying value= $36,869 – $32,776 = $4,093Carrying Value = Carrying value – Amortization of premium= $819,408 – $4,093 = $815,315June 30, Year 3:Cash Interest payment = Carrying value x Coupon rate / 2= $815,315 × 9% / 2 = $36,680Interest on Carrying Value = Carrying value x Market rate / 2= $815,315 × 8% / 2 = $32,625Amortization of Premium = Cash interest payment – Interest on carrying value= $36,680 – $32,625 = $4,055Carrying Value = Carrying value – Amortization of premium= $815,315 – $4,055 = $811,260Dec. 31, Year 3:Cash Interest payment = Carrying value x Coupon rate / 2= $811,260 × 9% / 2 = $36,491Interest on Carrying Value = Carrying value x Market rate / 2= $811,260 × 8% / 2 = $32,450Amortization of Premium = Cash interest payment – Interest on carrying value= $36,491 – $32,450 = $4,041Carrying Value = Carrying value – Amortization of premium= $811,260 – $4,041 = $807,219Hence, the required Amortization table for the first three years of the bonds is as follows:Carrying Value = Face value + Premium on bondsJan. 1, Year 1: Cash Interest payment = $37,620 Interest on Carrying Value = $33,440 Amortization of Premium = $4,180 Carrying Value = $831,820June 30, Year 1: Cash Interest payment = $37,430 Interest on Carrying Value = $33,272 Amortization of Premium = $4,158 Carrying Value = $827,662Dec. 31, Year 1: Cash Interest payment = $37,244 Interest on Carrying Value = $33,106 Amortization of Premium = $4,138 Carrying Value = $823,524June 30, Year 2: Cash Interest payment = $37,057 Interest on Carrying Value = $32,941 Amortization of Premium = $4,116 Carrying Value = $819,408Dec. 31, Year 2: Cash Interest payment = $36,869 Interest on Carrying Value = $32,776 Amortization of Premium = $4,093 Carrying Value = $815,315June 30, Year 3: Cash Interest payment = $36,680 Interest on Carrying Value = $32,625 Amortization of Premium = $4,055 Carrying Value = $811,260Dec. 31, Year 3: Cash Interest payment = $36,491 Interest on Carrying Value = $32,450 Amortization of Premium = $4,041 Carrying Value = $807,219