**Question:**Duke Corporation issued $2,600,000, 5-year, 7% bonds for $2,496,000 on January 1, 2022. Interest is paid semiannually on January 1 and July 1. The corporation uses the straight-line method of amortization. Duke's fiscal year ends on December 31. The amount of discount amortization on July 1, 2022, would be - A. $20,800- B. $104,000- C. $10,400- D. $182,000**Explanation:**This question involves calculating the discount amortization using the straight-line method. The discount on the bonds is the difference between the face value and the issuance price:- **Face Value of Bonds:** $2,600,000- **Issuance Price:** $2,496,000- **Discount:** $2,600,000 - $2,496,000 = $104,000Since the bonds are a 5-year term and amortization is straight-line:- **Amortization Amount Per Period:** $104,000 / (5 years * 2 periods per year) = $104,000 / 10 = $10,400Therefore, the correct answer is **C. $10,400**.

Discount on issue of bond= Par value of bond - Issue priceSemiannual discount amortization = Total…

Duke Corporation issued $2,600,000, 5-year, 7% bonds for $2,496,000 on January 1, 2022. Interest is paid semiannually on January 1 and July 1. The corporation uses the straight-line method of amortization. Duke's fiscal year ends on December 31. The amount of discount amortization on July 1, 2022, would be OA. $20,800. OB. $104,000. OC. $10,400. OD. $182,000. CE

Duke Corporation issued $2,600,000, 5-year, 7% bonds for $2,496,000 on January 1, 2022. Interest is paid semiannually on January 1 and July 1. The corporation uses the straight-line method of amortization. Duke's fiscal year ends on December 31. The amount of discount amortization on July 1, 2022, would be OA. $20,800. OB. $104,000. OC. $10,400. OD. $182,000. CE

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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