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What amount of the bond discount should be amortized

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Reference no: EM132881027

On July 1, 2016, Tarra Company issued 4,000 of 8%, P1,000 face value bonds payable for P3,504,000. The bonds were issued to yield 10%. The bonds are dated July 1, 2016 and mature on July 1, 2026. Interest is payable semiannually on January 1 and July 1.

Problem 1. Using the effective interest method, what amount of the bond discount should be amortized for the six months ended December 31, 2016?

a. 30,400
b. 24,800
c. 19,840
d. 15,200

Reference no: EM132881027

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