Choice "A" is correct. The carrying amount of the bond on December 31 will be equal to the $50,000 face amount of the bond less the unamortized bond discount, determined as follows: Date
| Interest payment
| Interest expense
| Amortization
| Carrying amount
|
|---|
1/1 | | | | $46,139 | 6/30 | $2,000 | $2,307 | $307 | $46,446 | 12/31 | $2,000 | $2,322 | $322 | $46,768 | 6/30 | $2,000 | $2,338 | $338 | $47,106 |
Choice "b" is incorrect. At year-end a portion of the bond discount will be amortized and the carrying value of the bond will no longer be equal to the original bond issue price of $46,139.
Choice "d" is incorrect. This is the carrying amount of the bond on June 30 of the current year, as shown in the amortization table.
Choice "c" is incorrect. This is the carrying amount of the bond on June 30 of the next year, as shown in the amortization table.
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