1 Straight Line vs Effective Interest Amortization Methods 2 4 5 Ranger Co. issues bonds dated January 1, information about the bonds is below. Interest is paid semiannually on June 30 and December 31. Par Rate 850,000 12% 90 6 Term 3 7 Market Rate 10% 8 Issue Price 893,131 9 Semi annual interest 51,000 10 11 1. What is the amount of the premium on these bonds at issuance? 12 13 14 15 16 Issue Price 893,131 Par 850,000 premium 43,131 7,189 premium amoritized per period 17 2. How much total bond interest expense will be recognized over the life of these bonds? Total Bond Interest Expense Over Life of Bonds: 18