Answered: On Janua

Business

Accounting

On Janua

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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Question

On January 1, a company issued and sold a $490,000, 3%, 10-year bond payable, and received proceeds of $484,000. Interest is payable each June 30 and December 31. The company uses the straight-line method to amortize the discount. The carrying value of the bonds immediately after the second interest payment is:

A. $483,700.

B. $484,600.

C. $489,700.

D. $484,300.

E. $490,000.

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