On January 1, 2001, Robben Corporation issued $500,000 of 12% 15-year bonds (interest is paid semi-annually on June 30 and December 31). The effective yield is 8%. Robben uses the effective interest method to amortize bond premium/discount. On June 30, 2002, the adjusted bond premium balance should be:
$169,838
$166,631
$164,021
$163,297
On January 1, 2001, Robben Corporation issued $500,000 of 12% 15-year bonds (interest is paid semi-annually on June 30 and December 31). The effective yield is 8%. Robben uses the effective interest method to amortize bond premium/discount. On June 30, 2002, the adjusted bond premium balance should be:
$169,838
$166,631
$164,021
$163,297
Related questions
Effective Interest Premium Amortization
Polk Incorporated issued $440,000 of 13% bonds on July 1, 2013,for $454,963.51. The bonds were dated January 1, 2013, pay intereston each June 30 and December 31, are due December 31, 2017, andwere issued to yield 12%. Polk uses the effective interest methodof amortization.
In addition, prepare a bond interest expense and premiumamortization schedule for the bonds through June 30, 2014.
Polk incorporated
Bond interest Expense and Premium Amortization Schedule(Partial)
Effective Interest Method
13% Bonds Sold to Yield 12%
| Date | Cash Credit | Interest Expense Debit | Unamortized Premium Debit | Book Value of Bonds |
| 07/01/13 | $454,963.51 | |||
| 12/31/13 | $28,600 | $27,297.81 | $1,302.19 | $????? |
| 06/30/14 | $28,600 | $27,219.68 | $1,380.32 | $452,281 |
