ACC Inter II ch 14

4a) Enterprise Group issued $100,000 of 4-year, 6% bonds outstanding on December 31, 2015 for $94,000. Enterprise uses straight-line amortization. On April 1, 2016, $20,000 of the bonds were retired at 96. What is the book value of the bonds sold on April 1?

4b) Ava, Inc., issued 7% bonds, dated January 1, with a face amount of $152,000 on January 1, 2016 for an issue price of 88.5. The bonds mature on December 31, 2025 (10 years). For bonds of similar risk and maturity the market yield is 9%. Interest is paid annually on December 31.

What is the 1st year's interest expense?