Blanding Company Issues $1,000,000 of 8%, 10-Year Bonds at 98

Multiple Choice

Blanding Company issues $1,000,000 of 8%, 10-year bonds at 98 on February 28, 2014. The bonds pay interest on February 28 and August 31. Assume that Blanding uses the straight-line method for amortization. What net balance will be reported for the bonds on the balance sheet on August 31, 2014?

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