On January 1, 2023, Entity J issued $2,000,000 of 4% bonds with a five-year term....
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On January 1, 2023, Entity J issued $2,000,000 of 4% bonds with a five-year term. Interest is payable annually on January 1. The market interest rate was 6%. The issue price was $1,831,509. Entity J uses the effective interest method for amortization of bond discount or premium. What is the new carrying value of the bonds after the first interest accrual on December 31?
On January 1, 2023, Entity J issued $2,000,000 of 4% bonds with a five-year term. Interest is payable annually on January 1. The market interest rate was 6%. The issue price was $1,831,509. Entity J uses the effective interest method for amortization of bond discount or premium. What is the new carrying value of the bonds after the first interest accrual on December 31?
a. $1,861,400
b. $1,831,509
c. $3,000,000
d. $2,000,000
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