On January 1,2019,Always Corporation issues $2,800,000,5-year,11% bonds for $2,720,000.Interest is paid semiannually on January 1 and July 1.Always Corporation uses the straight-line method of amortization.The company's fiscal year ends on December 31.The amount of discount amortized on July 1,2019 is:

Question

Quizplus · Accepted Answer

$2,800,000 - $2,720,000 = $80,000 discount
$80,000 ÷ 5 year × 6/12 = $8,000 discount amortization per period

On January 1,2019,Always Corporation Issues $2,800,000,5-Year,11% Bonds for $2,720,000