Question
On January 1. 2014. a corporation issued $400.000 of 10-year, 12% bonds. The interest is payable semi-annually on June 30 and December 31 The issue
On January 1. 2014. a corporation issued $400.000 of 10-year, 12% bonds. The interest is payable semi-annually on June 30 and December 31 The issue price was $413.153 based on a 10% effective (market) interest rate Assuming the effective-interest method of amortization is used. the interest expense for the six-month period ending December 31. 2014 is closest to:
A. $24.000.
B. $20.491.
C. $20.000.
D. $20.825.
Step by Step Solution
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Step: 1
A 24000 B 20491 C 20000 D 20825 June 30 2014 interest expense 20658 January 1 2014 book value x t...
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Step: 2
Step: 3
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Intermediate accounting
Authors: J. David Spiceland, James Sepe, Mark Nelson
7th edition
978-0077614041, 9780077446475, 77614046, 007744647X, 77647092, 978-0077647094
