Answer:
correct option is b. $184,500
Explanation:
given data
issued amount = $3,000,000
rate = 11%
bonds for = $3,195,000
market rate of interest = 10 %
solution
firs we get here Cash paid that is
Cash paid = $3,000,000 × 11%
Cash paid = $330,000
and
Interest expense will be
Interest expense = $3,195,000 × 10%
Interest expense = $319,500
so premium amortization is
premium amortization = $330,000 - $319,500
premium amortization = $11,500
and premium over the 3 million = 195,000
so
New premium will be as
New premium = $195,000 - $11,500
New premium = $184,500
so correct option is b. $184,500