Cotton Company issued $500000 of 7% 10-year bonds on one of its interest dates for $431850 to yield an effective annual rate of 9%. The effective-interest method of amortization is to be used. Interest is paid annually. What amount of discount (to the nearest dollar) should be amortized for the first interest period?
A) $4770
B) $6133
C) $7732
D) $3867
Correct Answer:
Verified
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