Issue one 20 yr bond, face value $1,000, stated rate is 10%, Market rate is 8%
Cash $1196.37
Unamortized Bond Premium $196.37
Bonds Payable $1,000
First Period Payment
Interest Expense $95.71
Unamortized Bond Premium $4.29
Cash $100
Second Period Payment
Interest Expense $95.37
Unamortized Bond Premium $4.63
Cash $100
Third Period Payment
Interest Expense $95.00
Unamortized Bond Premium $5.00
Cash $100