What is the net amount of the bond liability to be reported on the December 31,2020 balance sheet?

A) $300,000.
B) $302,550.
C) $302,700.
D) $303,000.

The bonds were issued at a premium of $3,000 ($303,000 - $300,000). The premium needs to be amortized over the life of the bonds using the straight-line method. The total premium to be amortized is $3,000, which will be amortized equally over 20 semiannual periods. Each semiannual amortization will be $150 ($3,000 ÷ 20). As of December 31, 2020 (which is the end of the first year since issuance), two semiannual amortizations will have been made for a total amortization of $300 ($150 × 2). Therefore, the net amount of the bond liability to be reported on the December 31, 2020 balance sheet is $302,700 ($300,000 bond liability - $300 amortization + $2,700 premium remaining).