2) Vaughn Corporation issued $300,000 face value ten-year, 10% bonds on January 1, 2001, for $340,260. The bonds pay interest annually on January 1 and the effective interest rate is 8%. Show all of your calculations. a) Assuming that the premium on bonds payable is amortized using the straight-line method, Vaughn should report premium on bonds payable on its December 31, 2001, balance sheet of [4] b) Assuming that the premium on bonds payable is amortized using the effective interest method, Vaughn should report premium on bonds payable on its December 31, 2001, balance sheet of