Effective Interest Method Excel Template (for Discount Bonds)

Face Value: $100,000

Stated Rate: 6.000%
Maturity Period (Years): 5
Payment Frequency/Year: 4
Market Rate/Effective Rate: 8.000%
Issue Price: $91,824.28

Debit Balance
Interest Payment Interest Expense Amortization of in Discount on
(Stated Rate x Face (Effective Rate x Discount on Bonds Bonds Payable
Payment No. Value) Carrying Value) Payable Account Account
Debit Interest Credit Discount on Bonds
Credit Cash account Expenses account Payable account
0 8175.72
1 $1,500 $1,836.49 336.49 7839.23
2 $1,500 $1,843.22 343.22 7496.02
3 $1,500 $1,850.08 350.08 7145.94
4 $1,500 $1,857.08 357.08 6788.85
5 $1,500 $1,864.22 364.22 6424.63
6 $1,500 $1,871.51 371.51 6053.12
7 $1,500 $1,878.94 378.94 5674.19
8 $1,500 $1,886.52 386.52 5287.67
9 $1,500 $1,894.25 394.25 4893.42
10 $1,500 $1,902.13 402.13 4491.29
11 $1,500 $1,910.17 410.17 4081.12
12 $1,500 $1,918.38 418.38 3662.74
13 $1,500 $1,926.75 426.75 3236.00
14 $1,500 $1,935.28 435.28 2800.72
15 $1,500 $1,943.99 443.99 2356.73
16 $1,500 $1,952.87 452.87 1903.86
17 $1,500 $1,961.92 461.92 1441.94
18 $1,500 $1,971.16 471.16 970.78
19 $1,500 $1,980.58 480.58 490.20
20 $1,500 $1,990.20 490.20 0.00
or Discount Bonds)

Credit Balance in Book Value or

Bonds Payable Carrying Value of
account the Bonds

$100,000 $91,824.28
$100,000 $92,160.77
$100,000 $92,503.98
$100,000 $92,854.06
$100,000 $93,211.15
$100,000 $93,575.37
$100,000 $93,946.88
$100,000 $94,325.81
$100,000 $94,712.33
$100,000 $95,106.58
$100,000 $95,508.71
$100,000 $95,918.88
$100,000 $96,337.26
$100,000 $96,764.00
$100,000 $97,199.28
$100,000 $97,643.27
$100,000 $98,096.14
$100,000 $98,558.06
$100,000 $99,029.22
$100,000 $99,509.80
$100,000 $100,000.00
 Effective Interest Method Excel Template (for Premium Bonds)
Face Value: $100,000
Stated Rate: 7.000%
Maturity Period (Years): 5
Payment Frequency: 2
Market Rate/Effective Rate: 5.000%
Issue Price: $108,752.06

Credit Balance
Interest Payment Interest Expense Amortization of in Premium on
(Stated Rate x Face (Effective Rate x Premium on Bonds Bonds Payable
Payment No. Value) Carrying Value) Payable Account Account
Debit Interest Debit Premium on Bonds
Credit Cash account Expenses account Payable account
0 8752.06
1 $3,500 $2,718.80 781.20 7970.87
2 $3,500 $2,699.27 800.73 7170.14
3 $3,500 $2,679.25 820.75 6349.39
4 $3,500 $2,658.73 841.27 5508.13
5 $3,500 $2,637.70 862.30 4645.83
6 $3,500 $2,616.15 883.85 3761.97
7 $3,500 $2,594.05 905.95 2856.02
8 $3,500 $2,571.40 928.60 1927.42
9 $3,500 $2,548.19 951.81 975.61
10 $3,500 $2,524.39 975.61 0.00
r Premium Bonds)

Credit Balance in Book Value or

Bonds Payable Carrying Value of
account the Bonds

$100,000 $108,752.06
$100,000 $107,970.87
$100,000 $107,170.14
$100,000 $106,349.39
$100,000 $105,508.13
$100,000 $104,645.83
$100,000 $103,761.97
$100,000 $102,856.02
$100,000 $101,927.42
$100,000 $100,975.61
$100,000 $100,000.00
Effective Interest Rate Method Excel Template

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