On May 1, 2016, Ezzy Corporation issued a 6-year bond worth $400,000 with an interest rate of 8% per annum. Interest is to be paid semi-annually on October 31 and April 30. At the time of the issuance, the market interest rate was 6%. Ezzy Corporation amortizes any premium or discount using the effective interest method.

Redemption of the bond for its face value one year before maturity on May 1.