Answer:
Carrying Value=$3,903,000
Explanation:
First we will calculate the face value:
Face value=4000*$1000
Face value=$4,000,000
Purchase Price= Bond Purchased price- Accrued Interest
Purchase Price=$3,960,000-$60,000
Purchase Price=$3,900,000
Total months=100 months
Straight line Discount amortization= (Face Value-Purchase Price)/Total Months
Straight line Discount amortization=($4,000,000-$3,900,000)/100
Straight line Discount amortization=$1,000
Discount Amortization=Straight line Discount amortization*Discount months
Discount Amortization=$1,000*3
Discount Amortization=$3,000.
Carrying Value=Purchase Price+Discount Amortization
Carrying Value=$3,900,000+$3,000
Carrying Value=$3,903,000
