Suppose, on December 31, 2017, when the market interest rate is 6 percent, an investor purchases $5,000,000 of Belmont Products Inc.'s six-year, 5.5 percent bonds at issuance for $4,873,675. Interest is payable semi-annually. The investor plans to hold these bonds to maturity. Disregard commissions.
Required
Prepare a schedule for amortizing the discount on the bond investment through December 31, 2018. The investor uses the effective-interest amortization method. the purchase on December 31, 2017, the first semi-annual interest receipt on June 30, 2018, and the year-end interest receipt on December 31, 2018.