Hi,

How the premium discount amortization for amortizing bonds is calculated using Effective interest rate method? Here are the cashflows for the bond.
Date Principal Interest
31/12/2009 -10,000,000
31/12/2010 500,000
31/12/2011 1,000,000 500,000
31/12/2012 2,000,000 450,000
31/12/2013 3,000,000 350,000
31/12/2014 4,000,000 200,000