PLEASE ASSIST ME

Northern Corridor issued 10% bonds with a face value of $ 100,000 for $95,000. It will pay $10,000 in interest to bondholders each year. However, the difference between how much it has to ultimately repay in principle ($100,000) and the amount it receives from selling the bond ($95,000) represent an additional cost of financing period of 10 years. Required: Accounting for premium or discount 1) Straight-line method 2) Effective interest method ( assume the market interest rate is 8%)