Homework Answers
| Discount on Bonds issued =$8,500,000 - $7,700,000 =$800,000 | ||
| Interest expense for 1st 6-month period =$7,700,000*12%*6/12 =$462,000 | ||
| Interest paid in cash for 1st 6-month period =$8,500,000*10%*6/12 =$425,000 | ||
| Discount amortized for 1st 6-month period =$462,000 - $425,000 =$37,000 | ||
| So the Bond discount should be reduced by $37,000 for 6 months ended December 31,2021 | ||
| So Option A is answer | ||
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On June 30, 2021, Moran Corporation issued $8.5 million of its 10% bonds for $7.7 million....
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