View the step-by-step solution to: 1. Amortization of discount or premium. Grider Industries, Inc.

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1. Amortization of discount or premium.
Grider Industries, Inc. issued $6,000,000 of 8% debentures on May 1, 2010 and received cash totaling $5,323,577. The bonds pay interest semiannually on May 1 and November 1. The maturity date on these bonds is November 1, 2018. The firm uses the effective-interest method of amortizing discounts and premiums. The bonds were sold to yield an effective-interest rate of 10%.
Instructions
Calculate the total dollar amount of discount or premium amortization during the first year (5/1/10 through 4/30/11) these bonds were outstanding. (Show computations and round to the nearest dollar.)
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Solution of 548445_ACC.xls

Question:Amortization of discount or premium.

Grider Industries, Inc. issued $6,000,000 of 8% debentures on May 1, 2010 and received cash totaling $5,323,577. The bonds pay interest
semiannually...

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