Wayne Company issued bonds with a face value of $840,000, a 10% stated rate of interest, and a 10-year term. The bonds were issued on January 1, Year 1, and Wayne uses the straight-line method of amortization. Interest is paid annually on December 31.

Assuming Wayne issued the bonds for 106, the carrying value of the bonds on the December 31, Year 1 balance sheet would be:

Multiple Choice

• $845,040.

• $885,360.

• $895,440.

• $890,400.