General Investment Co.(GIC)purchased bonds on January 1,2015.GIC's accountant has projected the following amortization schedule from purchase until maturity: GIC purchased the bonds for:

Question

General Investment Co.(GIC)purchased bonds on January 1,2015.GIC's accountant has projected the following amortization schedule from purchase until maturity:  GIC purchased the bonds for:

Quizplus · Accepted Answer

The bond's face value is $200,000 and the premium/discount is not given in the question. However, the carrying amount on January 1, 2015, is given as $194,758. This means that GIC purchased the bonds at a discount of $5,242 ($200,000 - $194,758).