112. On January 1, 2024, Ruettgers Company issued for cash a $500,000, 5 year note bearing annual interest at 10% to Smith, Inc. The market rate of interest for a note of similar risk is 12%. What should be the balance of the Discount on Notes Payable account on the books of Leary at December 31, 2026 after adjusting entries are made, assuming that the effective-interest method is used? a. $0 b. $43,616 c. $24,016 d. $14,418 Ans: C, LO: 3, Bloom: AP, Difficulty: Difficult, Min: 3, AACSB: Analytic, AICPA BC: None, AICPA AC: Measurement Analysis and Interpretation, AICPA PC: Decision Making, IMA: Reporting & Control: Financial Statement Preparation, IFRS: None Discount 36,046.00 Face 500,000.00 Cash Int Int Exp Dis Amort Remaining Disc CV of bond 1/1/2022 36,046.00 463,954.00 6/30/2022 Solution: 12/31/2022 50,000.00 50,000.00 55,674.48 56,355.42 5,674.48 30,371.52 469,628.48 6,355.42 24,016.10 475,983.90