Answer: B. 46,768
Explanation: Completing an amortization table would allow us find for the present year the bond carrying amount.
The face amount of the bond multiplied by the coupon rate gives the interest payment. This payment adjusted for the number of installments paid per year is $2,000 which is given by:
50,000 × (8/2)% interest (half the year).
Interest expense is calculated as the effective rate of 5% multiplied by the beginning of the year's carrying value. The difference between the interest payment and interest expense give the amortization of discount.
Carrying Value: 46,139 (A) Value at 1/1/X1
Cash: 2 ,000 &n bsp; (50,000 x .04) (B) Never Changes
Expense: 2,30 6.95 (46,139 x .05) (C)
(B - C) -306.95 (D)
(A - D) 46,445.95 (Carrying Value at 6/30/X1)
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Carrying Value: 46,445.95 (A) Carrying Value at 6/30/X1
Cash: 2,000.0 0 (50,000 x .04) (B) Never Changes
Expense: 2,322.30 (46,445.95 x .05) (C)
(B - C): -322.30 (D)
(A - D): 46,768.25 (Carrying Value at 12/31/X1