Chapter 14, Problem P14AB.45BPGB

To determine

Determination of amount received at the time of issuance of bonds, when market rate of interest is more than the interest rate offered describes the method of computation of amount received on bond issuance and also amortization of discount under Effective interest method.

The Amount of discount on bonds issuance when the rate of interest offered in bonds is less than the expected market rate of interest and the amortization of such discount under Effective Interest method.