On January 1, a Company Issued and Sold a $400,000

Multiple Choice

On January 1, a company issued and sold a $400,000, 7%, 10-year bond payable, and received proceeds of $396,000. Interest is payable each June 30 and December 31. The company uses the straight-line method to amortize the discount.
- The carrying value of the bonds immediately after the first interest payment is:

A) $400,000.
B) $396,200.
C) $399,800.
D) $400,200.
E) $395,800.