I'm having a problem with this practice question:

"On July 1, 1992, York Co. purchased as a held-to-maturity investment $1,000,000 of Park, Inc.'s 8% bonds for $946,000, including accrued interest of $40,000. The bonds were purchased to yield 10% interest. The bonds mature on January 1, 1999, and pay interest annually on January 1. York uses the effective interest method of amortization. In its December 31, 1992, balance sheet, what amount should York report as investment in bonds?"

Since the investment will be recorded at it's discounted amount at issuance at the beginning of the year ($906.000) I assumed the amortization would have to be recorded at a full year amount of $10,600 making the correct answer $916,600. But the correct answer only take a half year amortization of $5,300 making the balance $911,300.

I just don't understand this answer. Maybe I'm assuming something that isn't true, like the issuance date. But if it's amortized only half for the first year won't the balance be thrown off?

The problem doesn't say the bonds were issued this year. Absent that piece of information, you would just amortize the bond from the date of purchase to maturity (in this case, over 6.5 years).