Question

Bond semiannual amoritization amount using straight-line method

On January 1, 2009, $1,000,000, 5-year, 10% bonds, were issued for $960,000. Interest is paid semiannually on January 1 and July 1. If the issuing corporation uses thestraight-line method to amortize discount on bonds payable, the semiannual amortization amount is:
1) $6,000
2) $4,000
3) $5,000
4) $8,000

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