Multiple Choice
[The following information applies to the questions displayed below.]
On January 1, Year 1, Weller Company issued bonds with a $400,000 face value, a stated rate of interest of 10%, and a 10-year term to maturity. Weller uses the effective interest method to amortize bond discounts and premiums. The market rate of interest on the date of issuance was 8%. Interest is paid annually on December 31.
-Assuming Weller issued the bonds for $431,940,what is the carrying value of the bonds on the December 31,Year 3?
A) $420,615
B) $426,495
C) $414,264
D) $404,800
Correct Answer:
Verified
Correct Answer:
Verified
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