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Morales Company Issued $400,000 of 8%, 5-Year Bonds at 106

Question 310

Multiple Choice

Morales Company issued $400,000 of 8%, 5-year bonds at 106, which pays interest annually. Assuming straight-line amortization, what is the carrying value of the bonds after one year?


A) $424,000
B) $421,600
C) $419,200
D) $426,400

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