Question

The Designer Company issued 10-year bonds on January 1. The 6% bonds have a face value of $716,000 and pay interest every January 1 and July 1. The bonds were sold for $595,075 based on the market interest rate of 7%. Designer uses the effective interest method to amortize bond discounts and premiums. On July 1 of the first year, Designer should record interest expense (round to the nearest dollar) of:

Answer 1

Answer:$20,828

Step-by-step explanation:

The interest expenses is the market rate(7%) multiply by bond sales value($595,075)

The answer is porated to six months