Weller Company issued bonds with a face value of $400,000, a 10% stated rate of interest, and a 10-year term. The bonds were issued on January 1, 2016, and Weller uses the effective interest method of amortization. The market rate of interest on the date of issue was 8%. Interest is paid annually on December 31.
Assuming Weller issued the bonds for $431,940, the carrying value of the bonds on the December 31, 2018 balance sheet would be closest to:
A. $420,615.
B. $426,495.
C. $414,264.
D. $404,800.
