A company issued 5-year, 7% bonds with a par value of $100,000. The market rate when the bonds were issued was 6.5%. The company received $101,137 cash for the
bonds. Using the straight-line method, the amount of recorded interest expense for the first semiannual interest period is:
a) $3,386.30.
b) $3,500.00.
c) $3,613,70.
d) $6,633.70.
e) $7,000.00.
show work please...
note: to your concern i put the questions on here b/c they are off a study guide in which the professor does't supply answers to and and i have worked them out myself but just want to compare to make sure im on the right track... thanks.
2007-09-11 02:34:01 · 4 answers · asked by jasmine 2 in Business & Finance ➔ Other - Business & Finance
The bond premium is $1,137 to be amortised on the straight-line basis over 10 semiannual payment periods, i.e. $113.70 each time. The interest at 7% on $100,000 is $7,000 per year, divided into 2 gives $3,500. The net semiannual interest is $3,500 - $113.70 = $3,386.30.
So the answer is (a)
2007-09-11 03:30:52 · answer #1 · answered by Sandy 7 · 0⤊ 0⤋
Really and thus far you have gotten how many people to do your homework? It's going to suck for you on test day.
2007-09-11 02:41:58 · answer #2 · answered by krennao 7 · 0⤊ 2⤋
b) $3,500.00
2007-09-11 03:11:09 · answer #3 · answered by Anonymous · 0⤊ 0⤋
please show me your answer.... i will cross-check that.
2007-09-11 02:51:40 · answer #4 · answered by Anonymous · 0⤊ 1⤋