[§557A-406]  Obligation to pay money. 
(a)  An amount received as interest, whether determined at a fixed, variable,
or floating rate, on an obligation to pay money to the trustee, including an
amount received as consideration for prepaying principal, shall be allocated to
income without any provision for amortization of premium.



(b)  An amount received from the sale,
redemption, or other  disposition of an obligation to pay money to the trustee
more than one year after it is purchased or acquired by the trustee, including
an obligation whose purchase price or value when it is acquired is less than
its value at maturity, shall be allocated to principal.  If the obligation
matures within one year after it is purchased or acquired by the trustee, an
amount received in excess of its purchase price or its value when acquired by
the trust shall be allocated to income.



(c)  This section shall not apply to
obligations to which sections 557A-409 through 557A-412, 557A-414, and 557A-415
apply. [L 2000, c 191, pt of §1]