Warner Company Issued $5,000,000 of 6%, 10-Year Bonds on One

Multiple Choice

Warner Company issued $5,000,000 of 6%, 10-year bonds on one of its interest dates for $4,318,500 to yield an effective annual rate of 8%.The effective-interest method of amortization is to be used.What amount of discount (to the nearest dollar) should be amortized for the first interest period?

A) $140,888
B) $68,150
C) $90,960
D) $45,480