On January 1, 2015 FSU issued 4%, 5 year bonds with a face amount of 50 million dollars to fund the renovation of the Gym building (and 12 new volleyball courts). The market yield for bonds of similar risk and maturity was 5%. Interest is paid semiannually on June 30 and December 31.

1. Prepare a bond discount amortization schedule assuming the straight-line method was used.

2. Now assume the contract rate was 5%, the market rate was 4%. Prepare a bond premium amortization schedule assuming the straight-line method was used.

Include all 10 payments in the table

STRAIGHT-LINE METHOD, NOT EFFECTIVE INTEREST