Total dollar amount of discount or premium amortization

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Benson Industries, Inc. issued $5,000,000 of 8% debentures on May 1, 2004 and received cash totaling $4,436,315. The bonds pay interest semiannually on May 1 and November 1. The maturity date on these bonds is November 1, 2012. 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 (5/1/04 through 4/30/05) these bonds were outstanding. (Show computations and round to the nearest dollar.)

Reference no: EM13142508

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