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    Straight Line: Amortization of Bond Discount

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    Tano issues bonds with a par value of $180,000 on January 1, 2008. The bonds' annual contract rate is 8%, and interest is paid semi-annually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuance is 10%, and the bonds are sold for $170,862.

    Use the straight-line method to amortize the discount for these bonds?

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    Solution Summary

    This is a dynamic Excel solution where you can see where numbers come from inside calculated fields. Using the straight-line method to amortize the discount an amortization schedule is prepared for bonds issued at discount.