On January 2, 2004, Yo Corporation sold $750,000 of bonds for $725,000. The bonds will mature in 10 years and pay annually interest on December 31. Yo 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 2004?

Select one:

a.

The carrying value will be $725,000.

b.

The unamortized discount will be greater that $25,000.

c.

The carrying value will be greater than $725,000.

d.

The carrying value will be less than $725,000.