The carrying value of the bond is $489,560.
<h3>What is the carrying value of a bond?</h3>
A bond's carrying value is defined as its par value or face value plus any unamortized premiums or discounts, minus any unamortized discounts.
This is deducted because it is represented on the balance sheet, the carrying value is the difference between the par value and the premium or discount.
<u>Computation of Carrying value of Bond</u>:
According to the given information,
First, there is a need to calculate the premium amount, that amount is calculated as follows:
Premium Amount = Face value of Bond – Proceeds received
Premium Amount = $530,000 – $558,5020
Premium Amount = -$505,5020
Now, there is a need to finding the Annual amortization value, this can be found out by the following:
Annual amortization = Premium Amount/Time period
Annual amortization = -$505,5020/10
Annual amortization = -$505,502
Then, the carrying value of the bond will be:
Carrying value of bond = face value – unamortized discount
Carrying value of bond = $530,000- (-$505,502×8%)
Carrying value of bond = $489,560
Therefore, the carrying value of the bond is $489,560.
Learn more about the carrying value of bond, refer to:
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