Given the following information from an amortization table, compute the effective interest expense, discount amortization, and the carrying value for the next line of the table:
6% Cash
Interest
7% Effective
Interest
Discount
Amortization
Carrying
Value
$42,000
$46,991
$4,991
$676,288
A) Effective Interest $46,664; Discount Amortization $4,664; Carrying Value $671,297
B) Effective Interest $47,340; Discount Amortization $5,340; Carrying Value $681,628
C) Effective Interest $48,114; Discount Amortization $6,114; Carrying Value $693,456
D) Effective Interest $47,714; Discount Amortization $5,714; Carrying Value $687,342
Answer: B
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