Required information

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At the beginning of his current tax year, David invests $12,260 in original issue U.S. Treasury bonds with a $10,000 face value that mature in exactly 20 years. David receives $920 in interest ($460 every six months) from the Treasury bonds during the current year, and the yield to maturity on the bonds is 7.2 percent. (Round your intermediate calculations to the nearest whole dollar amount.)

b. How much interest will he report this year if he does not elect to amortize the bond premium?

Answer is complete but not entirely correct.

Semiannual

Period Adjusted Basis

of Bond at

Beginning of

Semiannual

Period Interest Received Premium

Amortization Reported Interest

1

2

Yearly Total