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Komal Bansal
on Nov 13, 2024

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If the amount of a bond premium on an issued 11%, four-year, $100,000 bond is $12,928, the semiannual straight-line amortization of the premium is $1,416.

Bond Premium

The amount by which the market price of a bond exceeds its face value, typically occurring when the bond's interest rate is higher than the market rate.

Straight-Line Amortization

A method of systematically reducing a loan or the cost of an intangible asset over a fixed period, where equal amounts are expensed in each period.

Semiannual

Occurring twice a year; a term often used in finance to describe payments, interest accruals, or other events that happen every six months.

  • Understand the concepts and calculations related to bond issuance, including premiums, discounts, and carrying amount.
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Briley BlackmonNov 20, 2024
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