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

$20,781.25

Step-by-step 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+((28,000-20,300))/(8\ years*2)`

`=20,300+(7,700)/(16)`

= 20,300 + 481.25

= $20,781.25