Greco CoIssued Ten-Year Term Bonds on January 1,20x5,with a Face Value

Greco Co.issued ten-year term bonds on January 1,20x5,with a face value of $1,600,000.The face interest rate is 6 percent and interest is payable semi-annually on June 30 and December 31.The bonds were issued for $1,381,920 to yield an effective annual rate of 8 percent.The effective interest method of amortization is to be used.The carrying value of the bonds payable on the December 31,20x5,balance sheet date should be

A) $1,392,824.
B) $1,396,472.
C) $1,396,764.
D) $1,381,920.

Correct Answer:

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