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Asked Dec 12, 2019
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On January 1, 2020, $3,000,000, 10-year, 10% bonds, were issued for $2,910,000. Interest is paid annually on January 1. If the issuing corporation uses the straight-line method to amortize discount on bonds payable, the monthly amortization amount is

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$29,100
$9,000
$2,424
$750
 
 
 
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Compute the Annual amortization amount under straight line method: Amount of discount on bond issued = $3,000,000 - $2,910,000 S90,000 10 years bond Tenure Annual amortization under straight line method = $90,000 / 10 years $9,000

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