Question
On January 1, 2017, Gibraltur Corp sold $750,000 of bonds for $745,000. The bonds will mature in ten years and pay interest annually on December
On January 1, 2017, Gibraltur Corp sold $750,000 of bonds for $745,000. The bonds will mature in ten years and pay interest annually on December 31. Bueller properly recorded the payment of interest and amortization of the discount using the effective interest method. Which of the following statements is true about the carrying value of the bonds and/or the unamortized discount at the end of 2017?
Select one:
a. The carrying value will be $745,000.
b. The carrying value will be less than $745,000.
c. The unamortized discount will be less than $5,000.
d. The carrying value will be greater than $745,000.
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