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Exhibit 5: Amortization of Bond Discount Using the Interest Method
$400,000 of 9%, five-year bonds (semi-annual interest payments) sold to yield 10% at January 1, 2001.

Selling price is calculated as follows:

Present value of $400,000 in 5 years $400,000 0.61391 $245,564.00  
Present value of interest payments $18,000 7.72173 $138,991.14
$384,555.14 		 
Date Cash
payment 		Interest expense Discount amortization Carrying value of bonds
January 1, ’01 — — — $384,555.14
July 1, ’01 $18,000.00 $19,227.76 $1,227.76 $385,782.90
January 1, ’02 $18,000.00 $19,289.14 $1,289.14 $387,072.04
July 1, ’02 $18,000.00 $19,353.60 $1,353.60 $388,425.64
January 1, ’03 $18,000.00 $19,421.28 $1,421.28 $389,846.93
July 1, ’03 $18,000.00 $19,492.35 $1,492.35 $391,339.27
January 1, ’04 $18,000.00 $19,566.96 $1,566.96 $392,906.24
July 1, ’04 $18,000.00 $19,645.31 $1,645.31 $394,551.55
January 1, ’05 $18,000.00 $19,727.58 $1,727.58 $396,279.13
July 1, ’05 $18,000.00 $19,813.96 $1,813.96 $398,093.08
January 1, ’06 $18,000.00 $19,906.92* $1,906.92 $400,000.00
*$2.27 rounding error