Wood City, which is legally obligated to maintain a debt service fund, issued the following general obligation bonds on July 1, 2005:
align=”left”>
|
Term of bonds |
10 years |
|
Face amount |
$1,000,000 |
|
Issue price |
101 |
|
Stated interest rate |
6% |
Interest is payable January 1 and July 1. What amount of bond premium should be amortized in Wood’s debt service fund for the year ended December 31, 2005?
- $1,000
- $ 500
- $ 250
- $0