Blanding Company Issues $1 000 000 of 8%, 10- Year

Multiple Choice

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

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