On January 2, 2012, Golden Corporation sold $800,000 of bonds for $785,000. The bonds will mature in 10 years and pay interest annually on December 31. Golden properly recorded the payment of interest and amortization of the discount using the effective interest method. Which of the following statements is true about the carrying value of the bonds and/or the unamortized discount at the end of 2012?
A) The carrying value will be less than $785,000.
B) The carrying value will be $785,000.
C) The carrying value will be greater than $785,000.
D) The unamortized premium will be more than $15,000.
Correct Answer:
Verified
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