Suppose, $100,000 of 8% annual coupon rate, 10-year bonds were sold at 105,500 when the market rate of interest was 7%.

Q9. Using the effective interest method, the balance in the unamortized bond premium account at the end of the second period would be? answer is option b , how did they arrive at option b a. 880 b. 5,971 c. 7365 d. 440