On 1/1/17 Jose Incorporated issues a $10,000 bond with a term of 10 years and...
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Accounting
On 1/1/17 Jose Incorporated issues a $10,000 bond with a term of 10 years and an annual stated rate of 2%, with interest payments occurring annually every December 31. The market rate of interest on this bond is 6%. The proceeds (purchase price) of the bond are $7,056.02. What amount will Jose Incorporated credit to 'Discount on Bonds Payable' on 12/31/18 (i.e., the second year of the bond's life), assuming the company uses the effective-rate method for discount amortization? You may round your answer to the nearest dollar.
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