On January 1, 2011, Felipe Hospital issued a $250,000, 10 percent, 5-year bond for $231,601. Interest is payable on June 30 and December 31. Felipe uses the effective-interest method to amortize all premiums and discounts. Assuming an effective interest rate of 12 percent, approximately how much discount will be amortized on December 31, 2011?
A) $2,230
B) $1,480
C) $1,396
D) $987
Correct Answer:
Verified
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