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Assume that a bond is issued with the following characteristics:Date of bonds: January 1, 2005; maturity date: January 1, 2010; face value: $200,000; face interest rate: 10 percent paid semiannually (5 percent per period); market interest rate: 8 percent (4 percent per semiannual period); issue price: $216,222; bond premium is amortized using the effective interest method of amortization. What is the amount of bond premium amortization for the June 30, 2005, adjusting entry?

a) $1,351

b) $2,702

c) $8,649

d) $10,000

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Accounting Basics, Accounting

Category:- Accounting Basics
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