On January 1, Weatherholt Inc

question 149

Multiple Choice

On January 1, Weatherholt Inc. issued $4,000,000, 9% bonds for $3,756,000. The market rate of interest for these bonds is 10%. Interest is payable annually on December 31. Jean Loptein uses the effective-interest method of amortizing bond discount. At the end of the first year, Weatherholt should report unamortized bond discount of

• A) $219,600.
• B) $228,400.
• C) $206,440.
• D) $204,000.

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