EXERCISE 10-19 AMORTIZATION OF BOND PREMIUM OR DISCOUNT On Januar>- 1. 2001, Terrel Company sold S 100.000 of 10-year. 8% bonds at 92.5. an effective rate of 9%. Interest is to be paid on July 1 and December 31- Compute the premium or discount to be amortized in 2001 and 2002 using

(a) the straight-line method and

(b) the effective-interest method. Make the journal entries to record the amortization when the effective-interest method is used.