On January 1, 2021, $ 1,000,000, 5-year, 5% bonds, were issued for $ 957,349. The interest rate in effect when the bonds were issued was 6%. Interest is paid semi-annually on January 1 and July 1. What would be the amortized cost of the bonds on January 1, 2022?

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The amortized cost of the bonds is calculated using the effective interest method. The initial carrying amount is $957,349. Interest expense for each period is calculated using the market rate (6%/2 = 3% per period), and the cash interest paid is based on the coupon rate (5%/2 = 2.5% per period). The difference is added to the carrying amount. After two periods (one year), the amortized cost is $964,901.

On January 1, 2021, $ 1,000,000, 5-Year, 5% Bonds, Were