Discount-Mart issues $10 million in bonds on January 1, 2012. The bonds have a ten-year term and pay interest semiannually on June 30 and December 31 each year. Below is a partial bond amortization schedule for the bonds:
$\begin{array}{ccccc}
& \text { Cash } & \text { Interest } & \text { Decrease in } & \text { Carrying } \
\text { Date } & \text { Paid } & \text { Expense } & \text { Carrying Value } & \text { Value }\
1 / 1 / 12 & & & & \$ 8,640,967 \
6 / 30 / 12 & \$ 300,000 & \$ 345,639 & \$ 45,639 & 8,686,606 \
12 / 31 / 12 & 300,000 & 347,464 & 47,464 & 8,734,070\
6 / 30 / 13 & 300,000 & 349,363 & 49,363 & 8,783,433 \
12 / 31 / 13 & 300,000 & 351,337 & 51,337 & 8,834,770
\end{array}$
-What is the carrying value of the bonds as of December 31,2013?

Question

Discount-Mart issues $10 million in bonds on January 1, 2012. The bonds have a ten-year term and pay interest semiannually on June 30 and December 31 each year. Below is a partial bond amortization schedule for the bonds:
$\begin{array}{ccccc} 
& \text { Cash } & \text { Interest } & \text { Decrease in } & \text { Carrying } \
\text { Date } & \text { Paid } & \text { Expense } & \text { Carrying Value } & \text { Value }\
1 / 1 / 12 & & & & \$ 8,640,967 \
6 / 30 / 12 & \$ 300,000 & \$ 345,639 & \$ 45,639 & 8,686,606 \
12 / 31 / 12 & 300,000 & 347,464 & 47,464 & 8,734,070\
6 / 30 / 13 & 300,000 & 349,363 & 49,363 & 8,783,433 \
12 / 31 / 13 & 300,000 & 351,337 & 51,337 & 8,834,770
\end{array}$
-What is the carrying value of the bonds as of December 31,2013?

Quizplus · Accepted Answer

The carrying value of the bonds as of December 31, 2013, is $8,834,770, as shown in the last row of the amortization schedule.

Discount-Mart Issues $10 Million in Bonds on January 1, 2012