Exhibit 14-4 Piazzi, Inc. sold $400,000 of its 9%, five-year bonds dated January 1, 2013, on May 1, 2013, for $393,000 plus accrued interest. Interest is paid on January 1 and July 1 and straight-line amortization is used.
-Refer to Exhibit 14-4. The balance of Discount on Bonds Payable after the December 31, 2013, adjusting entry has been posted would be

Question

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The amount of discount to be amortized for the year 2013 is $7,000 ($400,000 x 9% x 8/12). 
After the adjusting entry has been posted, the Discount on Bonds Payable account will have a balance of $6,000 ($13,000 - $7,000).