Answer:
The correct option is D,$292,500
Explanation:
The unamortized bond discount is the balance of the bond discount left at the end of first year when that year portion of bond discount has been amortized.
In order to ascertain the balance of the unamortized bond discount,we prepare the bond schedule showing how much was amortized in the year as follows:
Bal b/f interest expense at10% coupon payment 9% Bal c/f
$3,995,000 $399,500 $387,000 $4,007,500
The amortized interest is the difference between the interest expense based on the cash proceeds and the coupon payment calculated on the face value of $4.3 million
amortized discount=$399,500-$387,000=$12,500
Total bond discount=$4,300,000-$3,995,000=$305,000
unamortized discount=$305,000-$12,500=$292,500
