Answer:
$9,747
Explanation:
Tonika company issued a $10,000, 8% bond
The issue price was on the basis of $9,676 on 9% effective interest rate
The first step is to calculate the discount amortization
Discount amortization= Interest expense-Interest paid
Interest paid= $10,000×8/100
= $10,000×0.08
= $800
Interest expense= $9,676×9/100
= $9,676×0.09
= $871
Discount amortization= $871-$800
= $71
Therefore, the book value at the end of December 31, 2019 can be calculated as follows
= $9,696+$71
= $9,747
Hence the interest expense on the income statement for the year ended December 31, 2019 is closest to $9,747
