On January 1, 2020, Buffalo Company sold 12% bonds having a maturity value of $550,000 for $591,698, which provides the bondholders with a 10% yield. The bonds are dated January 1, 2020, and mature January 1, 2025, with interest payable December 31 of each year. Buffalo Company allocates interest and unamortized discount or premium on the effective-interest basis.

Schedule of Interest Expense and Bond Premium Amortization Effective-Interest Method Interest Premium Expense Amortized Cash Paid Carrying Amount of Bonds Date 1/1/20 $ 12/31/20 12/31/21 12/31/22