Interest is paid semiannually on December 31 and June 30, so, the Amortisation of the Premium on the Bond is $931.42.
Dec 31, 2018       Amount     Interest Rate      Total
Interest Expense  $9,45,110.00   X     4%      =  $37,804.40
Cash          $8,60,000.00   X      5%       =  $38,700.00
Amortisation of Premium on Bond      =  $895.60
June 30, 2019   Amount      Interest Rate    Total
Interest Expense    $9,44,214.40   X     4.0%      = $37,768.58
(945110-895.60)
Cash          $8,60,000.00   X     4.5%      = $38,700.00
Amortisation of Premium on Bond      =  $931.42
Bond yield is the profit an investor makes from a bond investment. Bonds can be bought for more than their face value, known as a premium, or for less than their face value, known as a discount. Divided by the bond's market price, the current yield represents the bond's coupon rate.
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