The Following Partial Amortization Schedule Is Available for Courtney Company $\text { BOND AMORTIZATION SCHEDULE }$

question 217

Multiple Choice

The following partial amortization schedule is available for Courtney Company who sold $750,000, five-year, 10% bonds on January 1, 2017 for $780,000 and uses annual straight-line amortization. $\text { BOND AMORTIZATION SCHEDULE }$
$\begin{array}{|l|c|c|c|c|c|}\hline \text { Interest Periods } & \begin{array}{c}\text { Interest } \\\text { to be paid }\end{array} & \begin{array}{c}\text { Interest } \\\text { expense }\end{array} & \begin{array}{c}\text { Premium } \\\text { Amortization }\end{array} & \begin{array}{c}\text { Unamortized } \\\text { Premium }\end{array} & \begin{array}{c}\text { Bond Carrying } \\\text { Value }\end{array} \\\hline \text { January 1,2017 } & & & & \$ 30,000 & \$ 780,000 \\\hline \text { January } 1,2018 & \text { (i) } & \text { (ii) } & \text { (iii) } & \text { (iv) } & (\mathrm{v}) \\\hline\end{array}$ Which of the following amounts should be shown in cell (ii) ?

• A)$81,000
• B)$69,000
• C)$78,000
• D)$60,000

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Definitions:

Stroop Effect

A demonstration of cognitive interference where the brain's reaction time slows down when it has to deal with conflicting information.

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The ability to perform tasks without occupying the mind with the low-level details required, typically developed through repetition and practice.

Mental Processes

Mental processes involve the internal, cognitive operations that underlie all human thought, behavior, emotions, and experiences.

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An economic principle where individuals or firms attempt to obtain the highest possible satisfaction or benefit from their resources and choices.