On January 1,2015,Carter Sales issued $15,000 in bonds for $14,300.They were 8-year bonds with a stated rate of 9%,and pay semiannual interest.Carter Sales uses the straight-line method to amortize the bond discount.After the first interest payment on June 30,2015,what was the bond carrying amount? (Round your intermediate answers to nearest dollar.)

Question

Quizplus · Accepted Answer

The semiannual interest payment can be calculated as follows: 
($15,000 x 9%)/2 = $675 
For the first interest payment on June 30, 2015, the bond had been outstanding for 6 months (half a year). 
The amortization of the discount is calculated as ($15,000 - $14,300) / 8 = $87.50 per year, or $43.75 for half a year. 
Therefore, the bond carrying amount as of June 30, 2015 would be: 
$14,300 + $675 - $43.75 = $14,344.25 ≈ $14,344 (rounded to the nearest dollar). 
Therefore, the best choice is C.

On January 1,2015,Carter Sales Issued $15,000 in Bonds for $14,300