On December 31, 20X1, Dive Company sold $100,000, ten-year, 8% bonds at 104.5. The bonds were dated January 1, 20X1, and interest is payable each June 30 and December 31. The company uses the straight-line amortization method. The company should report the long-term liability (carrying value) for the bonds on the December 31, 20X1, statement of ﬁnancial position as which of the following?

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The bonds were sold at 104.5% of their face value, which means they were sold for $104,500 ($100,000 * 104.5%). Since the company uses the straight-line amortization method, the premium (the amount over the face value) will be amortized over the life of the bonds. However, for the December 31, 20X1 statement of financial position, the carrying value is still the initial amount because the question does not provide information about any amortization that has occurred within the year. Therefore, the carrying value remains at the initial sale price of $104,500.

On December 31, 20X1, Dive Company Sold $100,000, Ten-Year, 8