AICPA Adapted: Effective Interest and Bonds 1. On January 1, 2020, Wolf, Inc. issued its 10% bonds in the face amount of $500,000 that mature on January 1, 2030. The bonds were issued for $443,000 to yield 12%, resulting in bond discount of $57,000. Wolf uses the interest method of amortizing bond discount. Interest is payable July 1 and January 1. For the six months ended June 30, 2020, Wolf should report bond interest expense at a) $25,000 b) $26,580 c) $27,850 d) $28,420 Wolf Date Cash Interest Amortization CV Bonds Discount 1-1-20 7-1-20 12-31-20 1-1-20 Record the issuance: 7-1-20 Record the interest expense and bond discount amortization: 12-31-20 What is the balance in the bond discount @ 12/31/20? Bond Discount