Crop Corporation (with a December 31 year-end) issued $457,000, 6% bonds due in 6 years on May 1, 2016. Interest is paid semi-annually on October 31 and April 30 of each year. On the issuance date, the market rate of interest was 5%, resulting in a price of $480,500 for these bonds. The premium/discount is amortized using the effective interest rate method.