Question
Aggie Corporation issued $325,000, 6%, 10-year bonds on January 1, 2015 for $378,147. This price resulted in an effective interest rate of 4%. Interest is
Aggie Corporation issued $325,000, 6%, 10-year bonds on January 1, 2015 for $378,147.
This price resulted in an effective interest rate of 4%. Interest is payable semiannually on June 30
and December 31. Aggie uses the effective-interest method to amortize bond premium or discount.
Determine the interest expense that Aggie Corp. would report on their Income Statement for the year ended December 31, 2015.
| A. | $30,077 | |
| B. | $15,104 | |
| C. | $12,935 | |
| D. | $15,083 | |
| E. | $15,126 |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Modern Auditing Study Guide
Authors: Walter G. Kell
4th Edition
0471619434, 978-0471619437
