On January 1, 2012, Terrel Company sold $100,000 of 10-year, 8% bonds at 93.5, an effective rate

Question:

On January 1, 2012, Terrel Company sold $100,000 of 10-year, 8% bonds at 93.5, an effective rate of 9%. Interest is to be paid on July 1 and December 31. Compute the amount of premium or discount amortization in 2012 and 2013 using
(1) The straight line method and
(2) The effective-interest method. Make the journal entries to record the amortization when the effective-interest method is used.