Ten-year bonds with a face value of $600,000 were issued at 96 on January 1, 2019. The carrying value of the bond on December 31, 2020, after two years of interest payments and straight-line amortization is:

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The bonds were issued at 96, which means they were issued at 96% of their face value. Therefore, the initial carrying value is 96% of $600,000 = $576,000. Since the bonds are being amortized using the straight-line method over 10 years, the annual amortization amount is ($600,000 - $576,000) / 10 = $2,400. After two years, the total amortization would be $2,400 * 2 = $4,800. Therefore, the carrying value on December 31, 2020, would be the initial carrying value plus the total amortization, which is $576,000 + $4,800 = $580,800.

Ten-Year Bonds with a Face Value of $600,000 Were Issued