Foley Co. is preparing the electronic spreadsheet below to amortize the discount on its 10-year, 6%, $100,000 bonds payable. Bonds were issued on December 31 to yield 8%. Interest is paid annually. Foley uses the effective interest method to amortize bond discounts.
A / B / C / D / E
1 Year/ Cash paid/ Interest expense/ Discount amortization/ Carrying amount
2 1 $86,580
3 2 $6,000
Which formula should Foley use in cell E3 to calculate the bonds' carrying amount at the end of Year 2?
E2 + D3.
E2 - C3.
E2 + C3.
E2 - D3.