Effective interest method of amortizing bond discount

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Reference no: EM13789128

On July 1, Year 1, Cobb Company issued 9% bonds in the face amount of $1,000,000 which mature in ten years. The bonds were issued for $939,000 to yield 10%, resulting in a bond discount of $61,000. Cobb uses the effective interest method of amortizing bond discount. Interest is payable annually on June 30.

At June 30, Year 3, Cobb’s unamortized bond discount should be:

$52,810

$57,100

$48,800

$43,000

Reference no: EM13789128

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Effective interest method of amortizing bond discount : On July 1, Year 1, Cobb Company issued 9% bonds in the face amount of $1,000,000 which mature in ten years. The bonds were issued for $939,000 to yield 10%, resulting in a bond discount of $61,000. Cobb uses the effective interest method of amortizin..

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