On March 1,2010,Darby Corporation sold 82 of its 9 percent,$1,000 bonds for a price of 96 plus accrued interest.The accrued interest amounted to $1,000.If a balance sheet were to be prepared at the end of the day,March 1,2010,the carrying value reported for the bonds payable would be

Question

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The selling price for each bond is 96% of $1,000, which is $960. The total selling price of the 82 bonds is $78,720 ($960 × 82). The accrued interest of $1,000 should be added to the selling price to arrive at the total cash received from the bond issue, which is $79,720 ($78,720 + $1,000). Therefore, the initial carrying value of the bonds payable on the balance sheet would be $79,720.

On March 1,2010,Darby Corporation Sold 82 of Its 9 Percent,$1,000