On January 1, Year 1, Worthy Co. issued $1,000,000 of bonds payable. The bonds mature in five years on December 31, Year 5, and pay 9% interest once a year on December 31. The issue sold for $891,857 to yield 12%. Worthy uses the effective interest method. What is the amount of the liability at January 1, Year 1? a. $891,857 b. $1,000,000 c. $1,090,000 d. None of the answers are within $100 of the correct answer.

a. $891,857

b. $1,000,000

c. $1,090,000

d. None of the answers are within $100 of the correct answer.

On January 1, Year 1, Worthy Co. issued $1,000,000 of bonds payable. The bonds mature in five years on December 31, Year 5, and pay 9% interest once a year on December 31. The issue sold for $891,857 to yield 12%. Worthy uses the effective interest method. What is the amount of the liability at December 31, Year 1, after the first interest payment?

a. $908,880

b. $1,000,000

c. $931,590

d. $891,857

On January 1, Year 1, Worthy Co. issued $1,000,000 of bonds payable. The bonds mature in five years on December 31, Year 5, and pay 9% interest once a year on December 31. The issue sold for $891,857 to yield 12%. Worthy uses the effective interest method. What is the amount of the liability at December 31, Year 2, after the second interest payment?

a. $1,000,000

b. $931,590

c. $908,880

d. $927,945

On January 1, Year 1, Worthy Co. issued $1,000,000 of bonds payable. The bonds mature in five years on December 31, Year 5, and pay 9% interest once a year on December 31. The issue sold for $891,857 to yield 12%. Worthy uses the effective interest method. Year 3 interest expense is:

a. $270,000.

b. $120,000.

c. $111,353.

d. $90,000.