On January 1,2010,Jacob issues $800,000 of 9%,13-year bonds at a price of 96½.Six years later,on January 1,2016,Jacob retires 20% of these bonds by buying them on the open market at 105½.All interest is accounted for and paid through December 31,2015,the day before the purchase.The straight-line method is used to amortize any bond discount. What is the carrying value of the bond on January 1,2016?
A)$772,000
B)$831,076
C)$784,924
D)$772,000.
E)$800,000

Question

Quizplus · Accepted Answer

Amortized Disc: 1,077*12 = 12,924
Unamortized Disc.: 28,000-12,924 = 15,076
CV: PV 800,000 less Unamortized Disc. 15,076 = 784,924

On January 1,2010,Jacob Issues $800,000 of 9%,13-Year Bonds at a Price