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Date of bonds: January 1, 2023; maturity date: Dec. 31, 2027; face value: $200,000; Coupon interest rate: 10 percent paid semiannually; market interest rate: 12 percent; issue price: $185,280; bond discount is amortized using the effective interest method of amortization. What is the amount of bond discount amortization for the June 30, 2023, adjusting entry? A) $559 B) $1,117 C) $10,000 D) $11,117

Date of bonds: January 1, 2023; maturity date: Dec. 31, 2027; face value: $200,000; Coupon interest rate: 10 percent paid semiannually; market interest rate: 12 percent; issue price: $185,280; bond discount is amortized using the effective interest method of amortization. What is the amount of bond discount amortization for the June 30, 2023, adjusting entry? A) $559 B) $1,117 C) $10,000 D) $11,117

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Assume that a bond is issued with the following characteristics:

 

Date of bonds: January 1, 2023; maturity date: Dec. 31, 2027; face value: $200,000; Coupon interest rate: 10 percent paid semiannually; market interest rate: 12 percent; issue price: $185,280; bond discount is amortized using the effective interest method of amortization. What is the amount of bond discount amortization for the June 30, 2023, adjusting entry?

  1. A) $559
  2. B) $1,117
  3. C) $10,000
  4. D) $11,117
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