Question

On January​ 1, 2018, Wonderland Sales issued $28,000 in bonds for $20,300. These are eight−year bonds with a stated interest rate of 13​% and pay semiannual interest. Wonderland Sales uses the straightminus−line method to amortize the bond discount. What is the bond carrying amount after the first interest payment on June​ 30, 2018?​ (Round your intermediate answers to the nearest​ dollar.)

Answer 1

Answer:

$20,781.25

Explanation:

Bond carrying amount after the first interest payment on June​ 30, 2018:

= Carrying value of bond On January 1, 2018 + Amortization of discount on June 30, 2018

$=20,300+\frac{(28,000-20,300)}{8\ years\times2}$

$=20,300+\frac{7,700}{16}$

      = 20,300 + 481.25

      = $20,781.25