On December 31, Year 1, Airways Corp. issued $1 million in bonds at 5 percent annual interest,
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On December 31, Year 1, Airways Corp. issued $1 million in bonds at 5 percent annual interest, due December 31, Year 6 at a discount of $100,000. Airways incurred bank fees of $100,000, legal fees of $50,000, and salaries of $25,000 for its employees in conjunction with issuing the bonds. What is the original carrying amount for these bonds?
a. $725,000.
b. $750,000.
c. $850,000.
d. $900,000.
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