During the year,Franklin Corporation incurred the following costs in connection with the issuance of bonds:

The amount recorded as a deferred charge to be amortized over the term of the bonds is

Question

During the year,Franklin Corporation incurred the following costs in connection with the issuance of bonds:

The amount recorded as a deferred charge to be amortized over the term of the bonds is

Quizplus · Accepted Answer

The amount recorded as a deferred charge to be amortized over the term of the bonds is equal to the sum of the legal and accounting fees, printing and engraving costs, and commissions paid on the issuance of the bonds, which is $510,000 in this case. These costs are recorded as a deferred charge and are amortized over the term of the bonds, reducing the effective interest rate on the bonds. Therefore, the correct answer is D.

During the Year,Franklin Corporation Incurred the Following Costs in Connection