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On February 1, 2020, Stratford issued 8% bonds, dated February 1, with a face amount of $600,000. The bonds sold for $436,167 and mature on January 31, 2040 (20 years). The market yeild for bonds of similar risk and maturity was 10%. Interest is paid semiannually on July 31 and January 31. Stratford's fiscal year ends December 31.  Calculate discount on bonds payable for February 1, 2020.  A. $163,833,  B. $136,833,  C. $48,000, or D. $552,000

On February 1, 2020, Stratford issued 8% bonds, dated February 1, with a face amount of $600,000. The bonds sold for $436,167 and mature on January 31, 2040 (20 years). The market yeild for bonds of similar risk and maturity was 10%. Interest is paid semiannually on July 31 and January 31. Stratford's fiscal year ends December 31.  Calculate discount on bonds payable for February 1, 2020.  A. $163,833,  B. $136,833,  C. $48,000, or D. $552,000

Principles of Accounting Volume 1
Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter13: Long-term Liabilities
Section: Chapter Questions
Problem 4EA: On January 1, 2018, Wawatosa Inc. issued 5-year bonds with a face value of $200,000 and a stated...
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On February 1, 2020, Stratford issued 8% bonds, dated February 1, with a face amount of $600,000. The bonds sold for $436,167 and mature on January 31, 2040 (20 years). The market yeild for bonds of similar risk and maturity was 10%. Interest is paid semiannually on July 31 and January 31. Stratford's fiscal year ends December 31. 

Calculate discount on bonds payable for February 1, 2020. 

A. $163,833, 

B. $136,833, 

C. $48,000, or

D. $552,000

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