At the end of 2019, TD Ameritrade has bonds payable with a net carrying value of $7,578 million on its balance sheet, including both the $7,000 million principal and $578 million Premium on bonds payable. The bonds' stated rate is 5% (paid annually), the current market rate is 3%, and the market rate at the time the bonds were issued was 4%. How much will interest expense on the bond be during 2020? How much will the bond premium be amortized during 2020?

Cash interest payment= Principal x Stated/Coupon Interest rate x Portion of year for which payment is made (e.g. full year or year)

Interest expense = Bond carrying value / book value x Market Interest rate at issuance x Portion of year for which expense is incurred (e.g. full year or year)

Amortization of (Decrease in) Premium or Discount on Bond Payable = Interest expense Cash interest payment

Debt-to-Equity = Total Liabilities / Total Stockholders Equity

At the end of 2019, TD Ameritrade has bonds payable with a net carrying value of $7,578 million on its balance sheet, including both the $7,000 million principal and $578 million Premium on bonds payable. The bonds' stated rate is 5% (paid annually), the current market rate is 3%, and the market rate at the time the bonds were issued was 4%. How much will interest expense on the bond be during 2020? How much will the bond premium be amortized during 2020? Stated rate: Current market rate: Market rate at time of bond issuance: Bonds payable at end of 2019: Premium on bonds payable at end of 2019: Interest expense on the bonds in 2020: Amortization of the bond premium in 2020: 0.05 0.03 0.04 7,000 578