On January 1, Year 1, Victor Company issued bonds with a $400,000 face value, a stated rate of interest of 3%, and a 5-year term to maturity. The bonds sold at 93. Interest is payable in cash on December 31 of each year. Victor uses the straight-line method to amortize bond discounts and premiums.What is the carrying value of the bond liability at December 31, Year 3?
A. $394,400
B. $388,800
C. $377,600
D. $383,200
Answer: B
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