Blanding Company Issues $1,000,000 of 8%,10-Year Bonds at 98 on February

question 142

Multiple Choice

Blanding Company issues $1,000,000 of 8%,10-year bonds at 98 on February 28,2014.The bond pays interest on February 28 and August 31.The market rate of interest on the issuance date was 10%.Assume Blanding uses the straight-line method for amortization.What net balance will be reported for the bonds on the balance sheet on August 31,2014?

• A) $981,000
• B) $1,000,000
• C) $979,000
• D) $980,000

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