What amount of bond discount should be amortized in wood

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Problem 1: Wood City, which is legally obligated to maintain a debt service fund, issued the following general obligation bonds on July 1, Year 1: Term of bonds 10 years, Face amount $1,000,000, Issue price 95 , Stated interest rate 6% Interest is payable January 1 and July 1. What amount of bond discount should be amortized in Wood's debt service fund for purposes of fund financial reporting for the year ended December 31, Year 1?

Option 1: $500

Option 2: $1,000

Option 3: $250

Option 4: $0

Reference no: EM132789544

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