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On January 1, 2020, $2730000, 10-year, 10% bonds, were issued for $2649000. 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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segehood

Answer:

$675

Explanation:

Given that,

Bonds face value = $2730000

Sell price = $2649000

Period = 10 years

Recall that

Monthly amortization amount = [(Bond face val. - sell. Pr.) ÷ 10] ÷ 12

Therefore

= [($2730000 - $2649000) ÷ 10] ÷ 12

= (81000 ÷ 10 ) ÷ 12

= 8100 ÷ 12

= $675

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