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Sparks Company Received Proceeds of $423,000 on 10-Year, 8% Bonds

Question 248

Multiple Choice

Sparks Company received proceeds of $423,000 on 10-year, 8% bonds issued on January 1, 2013. The bonds had a face value of $400,000, pay interest annually on December 31st, and have a call price of 102. Sparks uses the straight-line method of amortization. What is the carrying value of the bonds on January 1, 2015?


A) $400,000
B) $418,400
C) $381,600
D) $420,700

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