Thursday, August 11, 2011

What is the balance of the the bond discount (the unamortized discount) at the end of 2008?

On January 1, 2008, Bosque Company issued $1,000,000 9% bonds for $939,000. The market rate of interest at the time of the bond issue was 10%. Interest is payable annually oh December 31. Bosque uses the effective interest method of amortizing the bond discount. What is the balance of the the bond discount (the unamortized discount) at the end of 2008, after the first interest payment has been made?

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