Question
The fiscal year ends December 31 for Lake Hamilton Development. To provide funding for its Moonlight Bay project, LHD issued 9% bonds with a face
The fiscal year ends December 31 for Lake Hamilton Development. To provide funding for its Moonlight Bay project, LHD issued 9% bonds with a face amount of $690,000 on November 1, 2016. The bonds sold for $630,804, a price to yield the market rate of 10%. The bonds mature October 31, 2036 (20 years). Interest is paid semiannually on April 30 and October 31. |
Required: |
1. | What amount of interest expense related to the bonds will LHD report in its income statement for the year ending December 31, 2016?
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