Bond amortization schedule

Background
Omega (SUB) issued $1 million in 10 year bonds paying cash interest of 9 percent annually
Due to market conditions, omega sold the debt for $938,555 to yield an effective intrest rate
On 1/1/14, Omega decided to retire the debt due to a lower market rate
Alpha (Parent), purchased all the bonds on 1/1/14 for $1,057,466, based on an effective yield
Data
bond issue date
bond issue
term
coupon rate
effective rate
cash proceeds (BV)
reacquisition price
reacquisition rate
retirement date

1/1/2012
1000000 dollars
10 years
0.09 percent
0.1 percent
938555 dollars
1057466 dollars
0.08 percent
1/1/2014

Gain (Loss) on retirement

(reacquisition price minus BV at retirement date)

Date
1/1/2012
12/31/2012
12/31/2013
12/31/2014
12/31/2015

Face
value
1000000
1000000
1000000
1000000
1000000

Unamortized
discount
61445
57590
53348
48683
43552

110814

book value
938555
942411
946652
951317
956448

effective
interest
93856
94241
94665
95132

est of 9 percent annually

eld an effective intrest rate of 10 percent per year

based on an effective yield of 8%

cash
interest

discount
amortized

90000
90000
90000
90000

3856
4241
4665
5132